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2 January 2007 - Essent and Nuon, the two largest Dutch energy utilities, appeared set to clash with Dutch antitrust regulators after yesterday agreeing a €24bn ($31bn) merger to create one of Europe's largest power groups.
While it declined to comment directly on the deal ahead of formal notification, the Netherlands Competition Authority (NMa) said that in principle it would not approve any merger that created a dominant domestic market position for any company unless strict conditions were met.
In a report published last year - intended as guidance to the energy sector - the NMa indicated that it would require significant divestments of assets and of a portion of the combined company's customers. EssentNuon will have 5m clients, 80 per cent of them in the Netherlands - where it would control 70 per cent of the retail market - and the rest in Germany and Belgium.
EssentNuon would not speculate on the outcome of discussions with the NMa, but said it would seek to persuade the regulator to assess the merger in the light of wider European consolidation rather than purely on a domestic basis. The company cited a clutch of recent European energy takeovers and mergers to support its case that scale was essential for survival in the fast-consolidating sector.
However the NMa said that it would consider the proposal only on domestic grounds.
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