Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu .    EUROPEAN COMMISSION  
Brussels, 28.10.2020  
C(2020 ) 7581  final 
PUBLIC VERSION  
 
To the notifying p arty 
Subject : Case M.9929 — EDP/Viesgo  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 23 September 2020 , the European Commission received notification of a 
proposed concentration pursuant to Article 4 of the Merger Regulation by which 
Energias de Portugal S.A. (“EDP”, Portugal), acquires within the meaning of Article 
3(1)(b) of the Merger Regulation indirect sole control of the whole of Viesgo 
Infraestructuras Energéticas, S.L. (“Viesgo”, Spain) (the “Transaction”). The 
concentration is accomplished by way of pu rchase of shares.3 EDP and Viesgo are 
designated hereinafter as  the “P arties ”. 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the “Merger Regulation ”). With effect from 1 December 2009,  the Treaty on the 
Functioning of the European Union ( “TFEU ”) has introduced certain changes, such as the replacement of  
“Community ” by “Union ” and “common market ” by “internal market ”. The terminology of the TFEU will 
be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”).  
3  Publication in th e Official Journal of the European Union No C 321, 29.09.2020 , p. 45.  
In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 concerning 
non-disclosure of business secrets and other  
confidential information. The omissions are 
shown thus […] . Where possible the 
information omitted has been replaced by 
ranges of figures or a general description.  
 
 
2 1. THE PARTIES  
(2) EDP is a vertically integrated utility company and the largest generator, distributor 
and supplier of electricity in Portugal, with significant operation s in the ele ctricity 
sector in Spain. In total EDP is present in 19 countries in 4 continents  and is present 
throughout the electricity value chain and in the gas markets.  
(3) Viesgo’s main activities are the production and supply of electricity from renewable 
sources in  Spain and Portugal and the distribution of electricity in Spain. Viesgo is 
currently ultimately controlled by Macquarie Infrastructure and Real Assets Europe 
Ltd. (“MIRAEL”, United Kingdom).  
2. THE CONCENTRATION  
2.1. Multiple steps  
(4) The Transaction is accomplished  by way of purchase of shares  of Viesgo 
accompanied by the transfer of various assets of EDP’s  distribution businesses  
owned by E -Redes (ultimately controlled by EDP) into Viesgo . On 15 July 2020, 
EDP, Viesgo and MIRAEL signed the Amended and Restated Framework 
Agreement  (“Framework Agreement” ), governing  the steps necessary for the 
execution of a number of operations , as well as the conclusion of the concerned  Sale 
and Purchase A greements  (“SPAs ”), by which EDP acquires control of Viesgo 
leading to  the acquisition of both its distribution and generation businesses (“Viesgo 
Distribution Business” and “Viesgo Generation Business”) .  
2.2. Sole control  
(5) The Transaction will change  the situation of sole control of Viesgo by MIRAEL to 
sole control by EDP, with MIRA EL retaining an indirect non -controlling minority 
shareholding in Viesgo’s distribution business.  
(6) EDP will exert sole control over Viesgo’s distribution business . Resolutions of the 
general meeting of shareholders shall require the favourable vote of the simple 
majority of the share capital of Viesgo . Furthermore, for Board decisions, MIRAEL 
will have  a maximum of 1/3  of the Board members ,4 while decisions of the Board of 
directors will have to be taken with the favourable vote of more than 50% of the 
directors . Its minority shareholding confers on MIRAEL minority protection rights 
for specific decisions requiring its approval. However, these decisions do not relate 
to strategic decisions determining the commercial policy of Viesgo such as the 
business plan, the budget, any major investment or the appointment of senior 
management.  
2.3. Single concentration  
(7) The Framework Agreement regulates the conditions, procedure and steps necessary 
for the execution of all the different parts of the Transaction, which con stitute one 
                                                 
4  The Board of directors will be composed of a number of members [Details of the Shareholders’ 
Agreement] directors. [Details of the Shareholders’ Agreement]  directors will be appointed by EDP and 
[Details of the Shareholders’ Agreement]  directors will be appointed by MIRAEL. [Details of the 
Shareholders’ Agreement] . 
 
 
3 single concentration for merger control purposes for the following reasons. First, the 
Framework Agreement and the SPAs were signed simultaneously on 15 July 2020. 
Second, the SPAs of the respective parts of the Transaction are closely connecte d in 
that they formed part of the Framework Agreement entered into between EDP and 
Viesgo (amongst other parties). Third, the undertakings participating in EDP’s  
acquisition of control over the Viesgo Distribution Business and the Viesgo 
Generation Busines s are the same  (EDP and Viesgo) . The fact that MIRAEL retains 
a minority non -controlling stake in the distribution business does not impact this 
conclusion, in line with paragraphs 41 to 44 of the Commission Consolidated 
Jurisdictional Notice ( “CJN”)5. Fou rth, the fact that there is only a single 
concentration comprising different agreements is also reflected in EDP’s press 
release ,6 which states that the acquisition is unitary in nature.7  
3. EU DIMENSION  
(8) The undertakings concerned have a combined aggregate worldwide turnover of more 
than EUR 5 billion (EDP: [10,000 -15,000]  EUR million; Viesgo: EUR [200-400] 
million) . The aggregate Community -wide turnover of each of them exceeds EUR 
250 million (EDP: [10,000 -15,000]  EUR million; Viesgo: [200-400] EUR million) , 
and the undertakings concerned do not achieve more than two -thirds of their  
Community -wide  turnover in one and the same Member State.  The notified 
operation therefore has an EU dimension within Article 1(2) of the Merger 
Regulation.  
                                                 
5  Official Journal C 95, 16.04.2008, p. 1.  
6  According to the press release: “ Under the terms of the agreement, EDP‘s Spa nish electricity distribution 
subsidiary, ERedes, and Viesgo‘s electricity distribution units, Viesgo Distribución and Begasa, with a 
total RAB of €1.8 billion (post -Lesividad) and EBITDA of €320 million as of 31 December 2019, will be 
owned 75.1% by EDP a nd 24.9% by MIRA. Also, as part of the transaction, EDP will, through its 82.6% -
owned subsidiary EDP Renováveis, S.A. (“EDPR”), acquire 100% of the renewables business of Viesgo, 
which comprises 24 wind farms and two mini hydro power plants located through out Spain and Portugal 
representing a total of over 500 MW of installed net capacity, for an Enterprise value of €565 million. 
EDP will also acquire Viesgo’s two thermal generation plants in the south of Spain, which carry potential 
interconnection rights under the European Union’s “Green Deal Investment Plan and Just Transition 
Mechanism” following completion of their decommissioning. ” 
7  According to the press release: “ The Viesgo transaction coupled with the right issue represents a unique 
investment opportunity for EDP and is fully aligned with EDP’s equity story focused on growth in 
renewables and networks, in particular:  
- Enhances EDP’s exposure to electricity networks and renewables, critical enablers of the 
energy transition with strong long -term g rowth prospects.  
- More than doubles EDP’s presence in electricity distribution in Spain with perpetual 
licenses and regulatory visibility until 2025.  
- Further reinforces EDP’s position as leading global renewables player with a portfolio of 
high-quality asse ts with strong resource and extension/repowering potential, reinforcing 
EDP’s commitment with investments in Portugal and the remaining portfolio.  
- Strengthens EDP’s business risk profile by increasing EDP's exposure to regulated 
networks.  
- Maintains EDP’s s olid balance sheet and credit metrics.  
- Creates long -term value for shareholders by being accretive from both an earnings per 
share and cash flow perspective.”  
 
 
 
4 4. ANALYSIS  
(9) The Parties are both active in the following markets (i) the markets for generation 
and wholesale supply of electricity  in Spain and Portugal , and (ii) the grid-wide 
market s for the distribution of electricity  in Spain .  
(10) Against this background , the Transaction result s in one horizontally affected market, 
namely the Portuguese market for generation and wholesale supply of electricity.8 
(11) The activities of the Parties result in the following vertically affected markets:  (i) 
the market s for the grid -wide distribution of electricity in Portugal (upstream )9 and 
the market for generation and wholesale supply of electricity in Portugal 
(downstream ) and (ii) the market s for the grid -wide distribution of electricity in 
Spain  (upstream ) and the market for generat ion and wholesale supply of electricity 
in Spain (downstream ).  
4.1. Product and geographic market definition  
4.1.1.  Generation and wholesale supply of electricity  
(12) The Commission has consistently defined  the market for the generation and 
wholesale supply of electricity as encompassing the domestic generation of 
electricity  in power stations within a certain geographic market, traded on the 
wholesale market, as well as electricity physically imported into that geographic 
market via interconnectors , and irrespective of the different source s of electric 
energy10 within the wholesale electricity market .11  
(13) In  previous  decisions,  the  Commission  has  taken  the  view12 that  generation  
and wholesale  supply  of  electricity  are  a  single  relevant  product  market 
because  the generation  of  electricity  is  not  a n autonomous   market  activity  from 
its wholesale supply .13 
                                                 
8  In the Spanish market for generation and wholesale supply of electricity, the Parties’ combi ned market 
share in 2019 was [5-10]% in terms of capacity and [5-10]% in terms of production. The distribution 
markets are grid -wide in scope and one distribution grid is separate and not substitutable with distribution 
through another (see Section 4.1.2 ), therefore there can be no overlap between the distribution activities of 
the Parties in Spain .  
9  Distribution networks are a necessary input for g enerators to be able to supply electricity , and generators 
pay network charges to the grid operator to which they are connected . Therefore, distribution grids are 
upstream to the generation and wholesale supply market.  
10  Gas fired, coal fired, nuclear, h ydroelectric power stations, wind farms or others . 
11  COMP/M.8687 – Prisko/OKD Nastupnicka, paras. 55 seq; COMP/M.7850 – EDF/CGN/NNB Group of 
Companies, para. 54; COMP/M.8660 – Fortum/Uniper, paras 18 and 26.  
12  COMP/M.6984 – EPH/ Stredoslovenska Energetika; COMP/M.6540 – Dong Energy Borkumriffgrund I 
Holdco/ Boston Holding/ Borkum Riffgrund I Offshore Windpark; COMP/M.6225 – Molaris/Commerz 
Real/RWE/ Amprion; COMP/M.5979 – KGHM/Tauron Wytwarzanie/ JV. 
13  The Commission has also conside red a distinction between wholesale supply on the one hand and 
balancing and ancillary services on the other hand, and has taken the view that the market for the 
provision of balancing and ancillary services  is national in scope (COMP/M.7927 – EPH/ENEL/SE) . 
However, the Transaction does not give rise to any affected market in the provision of ancillary and 
balancing services in Spain  or Portugal.  
 
 
5 (14) The Commission has generally defined the geographic market for the generation and 
whol esale supply of electricity as national in scope.14The Parties do not contest the 
Commission’s practice .  
(15) In view of the Commission’s practice, and in the absence of evidence to the contrary, 
for the purposes of this decision, the Commission retain s the market definition 
identified above, that is the market for the generation and wholesale supply of 
electricity, which is national in scope.  
4.1.2.  Distribution of electricity  
(16) In previous decisions,15 the Commission has identified two separate markets for the 
transportation of electricity: transmission and distribution.16 For the competitive 
assessment of the Transaction the distribution market is the only relevant, because 
the transmission is not an affected market.   
(17) In relation to distribution  of electricity , in previous decisions, the Commission has 
identified a separate market for the distribution of electricity, namely the operation 
and management of the lower voltage grids .17 
(18) For the distribution of electricity, the Commission has previously considered that t he 
relevant geographic market is the territory  covered by a relevant distribution network  
forming a connected grid. Similarly to other  customer distribution  channels  one 
distribution grid is  separate and  not substitutable with distribution through another 
grid.18 
(19) The Parties agree with the Commission’s practice . 
(20) In view of the Commission’s practice, and in the absence of evidence to the contrary, 
for the purposes of this decision, the Commission will retain the market definition 
identified above  for the distribution of electricity, namely the operation and 
management of the lower voltage grids , which is grid-wide in scope . 
                                                 
14  COMP/M.5979 – KGHM/TAURON Wytwarzanie/JV, para. 24; COMP/M.5711 – RWE/Ensys, para. 21; 
COMP/M.4180 – GDF/Suez , para. 726.  
15  COMP/M.7927 – EPH/ENEL/SE, para. 21; COMP/M.5467 – RWE/EssentEssent, para. 179; 
COMP/M.4238 – E.ON/Prazskà plynárenská, para. 18.  
16  According to Articles 2(3) and 2(5) of Directive 2009/72/EC of 13 July 2009 concerning common rules 
for the  internal market in electricity and repealing Directive 2003/54/EC (OJ L 211, 14.8.2009, p. 55 –93), 
“transmission” means the transport of electricity on the extra high -voltage and high -voltage 
interconnected system with a view to its delivery to final cust omers or to distributors, but does not include 
supply, while “distribution” means the transport of electricity on high -voltage, medium -voltage and low -
voltage distribution systems with a view to its delivery to customers, but does not include supply.    
17  COMP/M.5827 – Elia/IFM/50Hertz , para. 18; COMP/M.5467 – RWE/Essent, para. 179, 440.  
18  COMP/M.5827 – Elia/IFM/50Hertz , para. 23; COMP/M. 5467 -RWE / ESSENT para 21; COMP/M.4238 
– E.ON/Prazskà plynárenská , para. 19; COMP/M.3440 – ENID/EDP/GDP , para. 75 . 


 
 
8  
(28) Viesgo is not active in the Portuguese market for the distribution of electricity.  
(29) Due to EDP’s (both in Spain and Portugal) and Viesgo’s (only in Spain) 
monopolistic position in those distribution grids that they own, the Transaction gives 
rise to the following vertically affected markets:  
(a) In Portugal: the market for distribution of electricity on which EDP is active 
(upstream ) and the market for generation and wholesale supply of electricity 
on which both Parties are active (downstream );  
(b) In Spain: the market for distribution of electricity on which both Parties are 
active (upstream ) and the market for generation and wholesale supply of 
electricity on which both Parties are active  (downstream ).  
(30) Because of EDP’s an d Vie sgo’s monopolistic position wit h regard to those 
distribution networks they operate, the relevant theory of harm would be foreclosure 
of third -party suppliers ’ access to their grids. For the reasons below, such a 
foreclosure would seem  not to be a serious concern .  
(31) First, the Parties claim that  no vertical choice  of distribution of electricity would  
technically be possible for generators in Portugal and Spain given that, under the 
current  national  regulatory framework s, an electricity  generator is never given the 
opportunity to choose to  which grid to connect.  This is because an  electricity 
generator will be connected to the operating grid where the power plant is located. 
The grid operator, provided there is available capacity and that it is technically 
possible (both conditions strictly applied under the supervision of the Portuguese and 
Spanish energy regulators), is under the obligation to grant access to its  distribution 
network under the conditions approved by the respective regulator.  In view of the 
existing regulatory framework in Portugal and Spain  and the responses to the 
Commission’s market investigation , the Commission considers  that post-Transaction 
EDP  would have limited if any  ability to foreclose third -party access to its 
distribution network , in spite of its monopolistic position in the distribution networks 
it operates.    
(32) Second, the actual vertical relationships between EDP and Viesgo are limited in 
number  in Spain, where [Details of Viesgo’s distribution network]  of EDP’s 
electricity generating assets [Details of Viesgo’s distribution network]  connected to 
Viesgo’s distribution network, and [Details of EDP’s distribution network]  of 
Viesgo’s electricity generating assets [Details of EDP’s distribution network]  
connected to E DP’s distribution network.   

 
 
9 (33) Third, Viesgo’s market share in the Portuguese and the Spanish market for the 
generation and wholesale of electricity is very limited, [0-5]% in Portugal and [0-
5]% in Spain, both in terms of capacity and production.  
(34) In view of  the existing regulatory framework, the limited number of actual vertical 
relationships between Viesgo and EDP, and Viesgo’s limited presence in the market 
for the generation and wholesale supply of electricity in Spain and in Portugal, it is  
unlikely that EDP will have an incentive  to undermine third -party access to its 
distribution network  post-Transaction.  
(35) In conclusion , the Transaction is unlikely to result in the foreclosure of third -party 
electricity generators and wholesalers in Spain and  Portugal.  The results of the 
Commission’s market investigation confirmed that other market players believe that 
EDP will not have the ability or incentive to foreclose access to its distribution 
network to third -party supplier s in Spain or Portugal.21  
(36) In view of the above, the Commission considers that the Transaction does not raise 
serious doubts as to its compatibility with the internal market  as a result of non -
horizontal effects either in the markets for generation and wholesale supply of 
electricity o r in the markets for distribution of electricity, both in Spain or Portugal . 
5. CONCLUSION  
(37) For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal market and with the 
EEA A greement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement.   
 
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice-President  
 
                                                 
21  Replies to Commission’s email of 24 September 2020.