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, 25.02.2020  
C(2020)  1219 final  
PUBLIC VERSION 
 
To the notifying p arties 
Subject : Case M.9587 -  ENGIE/EDP Renov áveis/EDPR Offshore Espa ña 
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 January 2020,  the European Commission received notification of a  
concentration pursuant to Article 4 of the Merger Regulation which would result 
from a proposed transaction by which ENGIE S.A. (“ENGIE”, France)  and EDP 
Renová veis S.A. ( “EDPR”, Spain), belonging to the EDP  group (Energias de 
Portugal, S.A., “EDP”, Portugal ), intend to acquire  joint control , within the meaning 
of Article s 3(1)(b) and 3(4) of the Merger Regulation, of EDPR Offshore Espa ña 
S.L.U. (“EDPR Offshore Espa ña” or the “JV”, Spain).3 ENGIE and EDPR are 
designated hereinafter as the “P arties ” or the “Notifying Parties” . 
                                                 
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 the Official Journal of the European Union No C 031, 30.1.2020, p. 7. 
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information omitted has been replaced by 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) ENGIE, headquartered in Fra nce, is a global energy group active in the fields of gas, 
electricity and energy services.  
(3) EDPR, headquartered in Spain, is a subsidiary of EDP active in the generation of 
renewable energy by developing, building and operating wind farms and solar plants  
worldwide. EDP is active globally in the generation, distribution and supply of 
electricity.  
(4) EDPR Offshore España, headquartered in Spain, is a subsidiary of EDPR active in 
offshore windfarm activities worldwide. Post-transaction, the JV would be mainly 
active in the development, construction and operation of wind farms and the 
generation and wholesale supply of electricity.  
2. THE OPERATION  
(5) The proposed transactions consists in the acquisition of joint control by ENGIE and 
EDPR over EDPR Offshore España.  
(6) Pursuant to a Memorandum of Understanding, signed on 21 May 2019, which sets 
out the Parties’ shared intention to form a JV, the concentration is to  be implemented 
by conclusion of a shareholder agreement and an investment agreement between 
ENGIE and EDPR.  In addition, for each asset to be contributed to the JV, the Parties 
will enter into a Share Purchase Agreement.   
(7) The Parties intend to combine their offshore wind activities in the JV, which upon 
implementation of the proposed transaction w ould be the exclusive vehicle for all 
their offshore windfarm activities globally.  Within the territory covering the EEA 
and the United Kingdom, the JV would be active in the generation and wholesale 
supply of electricity in Belgium, France, Poland, Portugal a nd the United Kingdom . 
The JV w ould also (to a lesser extent) be active in the development, construction and 
operation of offshore wind farms for its own use.  
(8) The JV has sufficient own staff  and dedicated management (a senior management 
team dedicated to i ts day -to-day operations and an estimated […] employees by the 
end of 2020) , as well as financial resources for its operation and for the management 
of its portfolio and business interests. Furthermore, the JV w ould have a market 
presence, is not expected to have significant sale or purchase relationships with its 
parents and is intended to operate on a lasting basis. Therefore, the JV would be  full 
functional. 
(9) ENGIE and EDPR will  each hold 50% of the JV’s shares , and they will be entitled to 
appoint an equal number of board directors ( […]). The board will be responsible for 
approving a broad catalogue of reserved matters4 and, given the required quorum and 
                                                 
4  Reserved Matters include approving any investment in excess of EUR […]  if such investment has been 
approved in the budget and EUR […]  if such investment has not been approved in the budget, approving 
any business plan and annual budgets, appointing and/or dismissal of any member of the management 
committee, and of the CEO an d Chief Operating Officer, appointing directors of the boards, committee 
members, officers and executives. (Form CO, paragraph 35).  
 
 
3 majority5 to pass board resolutions, both ENGIE and EDPR will have veto rights 
over the strategic d ecisions of the JV.  
(10) It follows that the proposed transaction would result in a concentration within the 
meaning of Articles 3(1)(b) and 3(4) of the Merger Regulation.  
3. UNION  DIMENSION  
(11) The Parties  have a combined aggregate worldwide  turnover of more than EUR  5 000 
million .6 Each of them has a U nion- wide turnover in excess of EUR 250 million, but 
they do not achieve more than two- thirds of their aggregate EU -wide turnover within 
one and the same Member State. The concentration has  therefore a Union dimension 
within the me aning of Article 1(3) of the Merger Regulation.  
4. RELEVANT MARKETS AND C OMPETITIVE ASSESSMEN T 
4.1. Market Definition  
(12) Although the JV w ould be active in the development, construction and operation of 
offshore wind farms , it w ould only do so for its own use , and the market is therefore 
not affected. The only markets affected by the proposed t ransaction are (i) the 
markets for the  generation and the wholesale supply of electricity  in Belgium and 
Portug al7 and (ii) the market for the retail supply of el ectricity.   
4.1.1. Generation and wholesale supply of electricity   
4.1.1.1. Product  market definition  
(A) The Commission's past  practice  
(13) In EON/INNOGY , the Commission  defined the generation and wholesale supply of 
electricity as a separate product market. In that decision t he Commissio n did not 
further segment the market for electricity generation and wholesale supply of 
electricity  based on the generation sources and trading channels .8 
                                                 
5  Reserved Matter require the approval of at least one of the directors appointed by each shareholder. The 
quorum at a Boar d meeting will consist of four directors including two directors appointed by each of the 
shareholders (Form CO, paragraph 35).  
6  Turnover calculated in accordance with Article 5 of the Merger Regulation . 
7  The Commission received a comment related to EN GIE’s strong position in the market for  green 
certificates (“GECs”) in the Flemish region . However, as the JV will not be active in this market and there 
are therefore no overlaps, this Decision will not discuss this market. In any case, the proposed trans action 
will not change ENGIE’s position with regard to GECs, since it already holds shares in the Belgian project 
that it will contribute to the JV, and EDP  only has […] MW under construction, which  will not be 
contribut ed to the JV.  EDP is also not presen t in the market for Flemish G EC (reply to RFI of 
18 February  2020).  
8  See e.g. Case COMP/M.8870 – EON/INNOGY . 
 
 
4 (B) The Notifying Parties ' view  
(14) The Parties do not contest the market definition in EON/INNOG Y.9 
(C) The Commission’s assessment  
(15) The market investigation in the present case confirms  the market definition  in 
Commission’s previous decisions . None of the market respondents indicated that a 
narrower market for generation and wholesale supply of electricity through 
renewable offshore sources should be considered.10  
(16) In light of the above considerations, in this Decision the market for generation and 
wholesale supply of electricity is considered to be  a single market.  
4.1.1.2. Geographic market definition  
(A) The Commission's past  practice  
(17) In previ ous decisions, the Commission considered the market for electricity 
generation and wholesale supply  of electricity to be national, but ultimately left open 
whether it could be broader in certain cases.11  
(B) The Notifying Part ies' view  
(18) The Parties do not  contest this geographic delineation for Belgium but regarding 
Portugal, they argue that the geographic market for the generation and wholesale 
supply of electricity should be broader than national and also include Spain, for the 
following reasons: (i) Portugal and Spain have been integrating their wholesale 
electricity markets into a single Iberian electricity market (MIBEL); (ii) they share a 
common spot market operator, OMIE (since 2007) and (iii) a forward market 
operator , OMIP (since 2006); (iv) prices are usually similar and (v) the regulatory 
framework is increasingly harmonised.12 
(C) The Commission’s assessment  
(19) As regards Portugal, a  majority of competitors who participated in the market 
investigation  indicated  that “the wholesale electricity market to consider is the 
Iberian market (MIBEL)”.13 As regards  Belgium, the market investigation was 
inconclusive, with some market participants buying from and selling to other 
Member States ( e.g. Germany and the Netherlands ) and others exclusively active in 
Belgium.14 
(20) In any case, for the purpose of this Decision, the geographic market definition can be 
left open between national and supra national, as the proposed t ransaction does not 
                                                 
9  Form CO, paragraph 139.  
10  Replies to question 12 of Questionnaires to wholesale customers Belgium and Portugal. Replies to 
question 10 of Questionnaires to wholesale competitors Belgium and Portugal.  
11  Case COMP/M.5979 KGHM / Tauron Wytwarzanie / JV, para. 24; Case COMP/M.4180 – GDF/Suez, 
para. 726. 
12  Form CO, paragraph 142.  
13  Replies to question 7 of Questionnaire to wholesale competitor s in Portugal.  
14  Replies to question 7 of Questionnaire to wholesale customers in Belgium.  
 
 
5 give rise to serious doubts as to its compa tibility with the internal market under any 
of these two alternative  markets.15  
4.1.2. Retail supply of electricity   
4.1.2.1. Product  market definition  
(A) The Commission's past  practice  
(21) In previous decisions, t he Commission segmented the market for  retail supply of 
electrici ty based on three categories of final customers : (i) large industrial and 
commercial customers , (ii) smaller industrial and commercial customers ; and (iii) 
households.16 
(B) The Notifying Parties ' view  
(22) The Parties do not contest the previous definition and argue that the product market 
definition can be left open.17 
(C) The Commission’s assessment  
(23) The market investigation confirms  the Commission’s market definition. N one of the 
market respondents indicated that a further segmentation for the retail supply of 
electricity  would be appropriate .18  
(24) In light of the above considerations and of the results of the market investigation, in  
this Decision, the retail market for the supply of electricity will only be segmented 
based on different final customer  groups . 
4.1.2.2. Geog raphic market definition  
(A) The Commission's past  practice  
(25) In previous decisi ons, the Commission considered the market for retail supply of 
electricity to be national. For the segments of retail supply of electricity to small 
industrial and commercial custome rs and to households, the Commission left open 
                                                 
15  In case the geographic market was defined as Iberian, no affected market would arise.  Therefore, this 
Decision will only discuss the potential impacts of the proposed transaction on the Portuguese market. If 
the market was broader than Belgium to cover also the Netherlands and Luxembourg, the market would 
be affected, but the combined mark et shares of the Parties would be significantly lower than in the case 
for the Belgian national market (ENGIE: [30 -40]% generation and [30 -40]% installed capacity and 
EDP:  [0-5]% generation and [0 -5]% installed capacity in Benelux. For comparison, the Parties’ combined 
market shares in a Belgian national market are [70-80]% in installed capacity and [60-70]% in 
generation). If the market was broader than Belgium and included France and Germany, no aff ected 
market would arise (Reply to RFI from 18 February 2020).  
16  In relation to Belgium s ee Case COMP/M.5549 EDF/Segebel , para. 132, Case COMP/M.8855; 
Otary/Eneco/Electrabel/JV , paras . 27-28. 
17  Form CO, paragraphs 144- 146. 
18  Replies to question 12 of Q uestionnaires to wholesale customers Belgium and Portugal. Replies to 
question 10 of Questionnaires to wholesale competitors Belgium and Portugal.  
 
 
6 whether the market for retail supply of electricity could  be regional (sub- national) in 
certain Member States, including Belgium  but not Portugal .19 
(B) The Notifying Parties ' view  
(26) The Parties do not contest the pr evious definition by the Commission. 
(C) The Commission’s assessment  
(27) With regard to large industrial and commercial customers, the market appears  to be  
national  in both Belgium and Portugal . The market investigation examined whether 
the market could be segmented between regions (Wallonia, Flanders and Brussels in 
the case of Belgium) for the retail supply of electricity to small industrial and 
commercial customers and households. The replies  to the market investigation 
suggested that such a  segmentation of the market was not warranted .20  
(28) For the purpose of this Decision , the Commission will leave the market definition 
open while focusing its analysis on the national level, as any difference i n the market 
shares between national and regional level  do not affect the competitive analysis .21  
4.2. Competitive Assessment  
(29) Under Article 2(2) and (3) of the Merger Regulation, the Commission must assess 
whether a proposed concentration would significantly impede effective competition 
in the internal market or in a substantial part of it, in particular throu gh the creation 
or strengthening of a dominant position.  
(30) In this respect, a merger may entail horizontal and/or vertical effects.  
(31) The proposed transaction gives rise to two horizontally affected markets: 
- The market for electricity generation and wholesale supply of electricity in 
Belgium  in which ENGIE , EDP  and the JV would be  active.  
- The market for electricity generation and wholesale supply of electr icity in 
Portugal  in which EDP , ENGIE  and the JV would be  active.  
(32) The proposed transaction also gives rise to six potential  vertical relationships : 
- In Belgium , the market upstream for electricity generation and wholesale supply 
of electricity in which ENGI E, EDP and the JV would be  active and, 
downstream, t he market s for retail  supply of electricity  to (i) large industrial and 
commercial customers, (ii) small industrial and commercial customers and 
(iii) households  in which ENGIE  is active.  
                                                 
19  See Case COMP/M.6984 – EPH/Stredeoslovenska Energetika, para. 18; Case COMP/M.5827 – 
Elia/IFM/50  Hertz , para. 24; Case COMP/M.5496 –  Vattenfall/ Nuon Energy , para. 15; and Case 
COMP/M.5467 – RWE/Essent , paras. 283 -284. In relation to Belgium, see Case COMP/M.4180 –  Gaz de 
France/Suez , paras. 738-743; and Case COMP/M.5549 – EDF/Segebel , para. 138.  
20  Replies to question 8 of Questionnaire to retail competitors in Portugal. Replies to question 8  of 
Questionnaire to retail competitors in Belgium.  
21  In 2018, ENGIE had a market share of [60 -70]% in the Brussels region, [40 -50]% in Flanders and 
[40-50]% in Wallonia.  
 
 
7  
- In Portugal, t he market upstream for electricity generation and wholesale supply 
of electricity in which EDP, ENGIE and the JV would be  active and, 
downstream, t he market s for retail supply of electricity to (i) large industrial and 
commercial customers, (ii) small indu strial and commercial customers and 
(iii) households  in which EDP, parent company of EDPR , is active. 
(33) Other than the affected markets identified in Belgium and Portugal, in other Member  
States where the JV is to be active (France and Poland),22 no affected markets 
arise.23 
4.2.1. Horizontal Overlaps  
4.2.1.1. The market for electricity generation and wholesale supply of electricity in 
Belgium  
(A) The Notifying Parties ' view  
(34) First, the  Notifying Parties  submit that the proposed transaction w ould not materially 
alter the current market structure and the Parties’ competitive incentives. The JV’s 
only asset in Belgium w ould be a minority shareholding in the offshore site 
Seamade, which has an electricity generation capacity of 487.2 MW, represent ing 
less than 4% of the total Belgian capacity.24 ENGIE currently holds 17.5% of 
Seamade, a minority interest that w ould be contributed to the JV.25 In addition, EDP 
would own just […] MW of additional generation capacity in Belgium (not offshore  
and still unde r construction), which w ould not be contributed to the JV.26  
(35) Second, despite the  Parties’ combined market share ( [70-80]% in installed capacity 
and [60- 70]% in generation), given the small increment ( [0-5]% and [0 -5]%) brought 
by the proposed t ransaction, the Notifying Parties argue that the proposed transaction 
would not raise serious doubts as to it s compatibility with the internal market. There 
are also a number of credible competitors on this market, e.g.  EDF 
Luminus  ([10-20]% market share for installed capacity and [10- 20]% for 
generation) .27  
(36) Third, t he Parties argue that ENGIE’s position in the Belgian electricity generation 
and wholesale market, where it is present through its subsidiary Electrabel, will 
continue to decreas e in the future. The position of incumbent Electrabel has been 
declining due to new entrants following liberalisation of the electricity market. In 
addition, Electrabel faces competition from suppliers of alternative energy and its 
market share is expected  to further decline after the closure of a number of nuclear 
power plants in the next ten years.28 
                                                 
22  In addition to the United Kingdom.  
23  Form CO, paragraph 207.  
24  Form CO, paragraph 195.  
25  Form CO, table 3.  
26  Form CO, paragraph 180.  
27  Form CO, Tables 14 and 15 . 
28  Form CO, paragraph 189.  
 
 
8 (37) Finally, the Parties submit that imports of electricity, particularly from France and 
Germany, pose additional competitive constraints.29 
(B) The Commission's asse ssment  
(38) The market investigation confirmed that the proposed t ransaction would not raise 
serious doubts as to it s compatibility with the internal market and there were no 
substantiated complaints . A clear majority of participants  in the market investigation  
expect the impact of the  proposed transaction to be neutral,30 with prices likely to 
remain the same.31 One wholesale customer also confirmed in the market 
investigation that they receive electricity from outside32 Belgium.  
(39) Given the negligible position of the JV (with a minority stake in a single wind  farm 
reflecting less than 5% of the capacity on the market), the very small increment in 
market shares (of [0 -5]% reflecting the […] MW capacity of the EDP generation in 
Belgium), the other market players and the competitive constraint coming from 
imports, the Commission concludes that the proposed t ransaction does not raise 
serious doubts as to its compatibility with the internal market.  
4.2.1.2. The market for electricity generation and wholesale supply of electricit y in 
Portugal  
(A) The Notifying Parties ' view  
(40) Despite the high combined market share ( [60-70]% in installed capacity  and 
[50-60]% in generation ), given the increment ( [5-10]% and [5 -10]% respectively ), 
the Notifying Parties  argue that the proposed t ransaction  would not raise serious 
doubts as to it s compatibility with the internal market.  
(41) Similar to the Belgian market, the incumbent EDP has continuously lost market 
share to competitors both in the generation and in the wholesale supply of 
electricity .33 Competitors on this market include  Trustenergy ( [5-10]% market share 
for installed capacity and [5 -10]% for generation), Endesa ( [0-5]% market share for 
installed capacity and [0 -5]% for generation), Finenergy ( [0-5]% marke t share for 
installed capacity) and Iberwind ( [0-5]% market share for installed  capacity ).34 
(42) Moreover , the electricity generation capacity of the JV in Portugal is […] MW, 
which represents less than 1% of the total Portuguese capacity. This impact w ould be 
                                                 
29  Form CO, paragraph 192.  
30  Replies to question 9 of Questionnaire to retail customers in Belgium.  
 Replies to question 10 of Questionnaire to retail competitors in Belgium.  
 Replies to question 11 of Questionnaire to wholesale customers  in Belgium.   
 Replies to question  9 of Questi onnaire to wholesale competitors  in Belgium.  
31 Replies to question 8 of Questionnaire to retail customers in Belgium , question 8.  
 Replies to question 9 of Questionnaire to wholesale customers in Belgium .    
 Replies to question 10 of Questionnaire to wholesale customers  in Belgium.  
 Replies to question  8 of Questionnaire to wholesale competitors  in Belgium.  
32  Repl y to question 7 of Questionnaire to wholesale customers in Belgium . 
33  Form CO, paragraph 196.  
34  Form CO, Tables 16 and 17 . 
 
 
9 even smaller in the future, in vi ew of the increasing number of wind park projects 
under development in Portugal.35  
(43) Finally , ENGIE and EDP already jointly own the Portuguese offshore site that they 
will contribute, WFA (54.4% by EDPR and 25% by ENGIE).36  
(44) On that basis, the Notifying Part ies submit that the proposed transaction w ould 
therefore not materially alter the current market structure and the Parties’ 
competitive incentives  in the market for electricity generation and wholesale su pply 
of electricity in Portugal . 
(B) The Commission's ass essment  
(45) The market investigation confirmed that the proposed t ransaction w ould not raise 
serious doubts as to it compatibility with the internal market and there were no 
substantiated complaints . A clear majority of participants in the market investigation  
expect the impact of the  proposed transaction to be neutral,37 with prices likely to 
remain the same.38 A number of replies also indicated that the Parties face 
competitive pressure from imports from Spain.39 A competitor described the 
wholesale electricity market in Portugal (and Spain) as “a transparent market with a 
high level of competition”.40  
(46) In the light of the results of the market investigation, t he Commission concludes that 
the proposed t ransaction does not raise serious doubts as to its compatibili ty with the 
internal market  for the following reasons : (i) the negligible position of the JV  in the 
market  (with a stake in a single wind  farm reflecting less than 1% of the capacity on 
the market), (i i) the very small increment in market shares (of [5 -10]% reflecting the 
position of ENGIE  in generation in Portugal), (iii ) the presence  of other market 
players and the competitive constraint coming from imports from Spain .  
                                                 
35  Form CO, paragraph 201.  
36  Form CO, paragraph 199.  
37  Replies to question 9 of Questionnaire to retail customers in Portugal.  
 Replies to question 10 of Questionnaire to retail competitors in Portugal.  
 Replies to question 11 of Questionnaire to wholesale customer s in Portugal.  
 Replies to question 9 of Questionnaire to wholesale competitors in Portugal.   
38  Replies to question 8 of Questionnaire to retail customers in Portugal.  
 Replies to question 9 of Questionnaire to wholesale customers in Portugal.  
 Replies to question 9 of Questionnaire to retail competitors in Portugal.  
 Replies to question 8 of Questionnaire to wholesale competitors in Portugal.  
39  Replies to question 7 of Questionnaire to retail customers in Portugal.  
 Replies to question 8 and 9 of Questionnaire to wholesale competitors in Portugal.   
40  Reply to question 8 and 9 of Questionnaire to wholesale competitors in Portugal.  
 
 
10 4.2.2. Vertical relationships  
4.2.2.1. The generation and wh olesale (upstream) and retail (downstream ) sale of electricity 
in Belgium  
(47) In Belgium , three vertically affected markets arise because of the activities of 
ENGIE, EDP and the JV upstream in t he market for electricity  generation and 
wholesale supply of electricity , and  ENGIE’s presence downstream in:  
(a) The market for the retail supply of electricity to large industrial and 
commercial customers ,  
(b) The market for the retail supply of electricity to small industrial and 
commercial customers , and  
(c) The market for the retail supply of electricity to househo lds. 
(48) As outlined in paragraphs  (34) to (35) above , at the upstream level  on the market for 
electricity  generation and wholesale supply  of electricity in Belgium,  in 2018 
ENGIE had a market share of [60- 70]% (in terms of generation) and of [60- 70]% (in 
terms of installed capacity), while EDP  had a market share of [0 -5]% (in terms of 
generation) and of [0 -5]% (in terms of installed capacity). The JV w ould have a 
minority share in a wind farm with a market share of [0 -5]% (in terms of generation) 
and of [0 -5]% (in terms of installed capacity). The combined market share at the 
upstream level was therefore relatively high at [60- 70]% (in terms of generation) and 
[70-80]% (in terms of installed capacity), but with the JV representing less than 5% 
([0-5]% in terms of installed capacity and [0 -5]% in ter ms of generation).  
(49) At the downstream level,  i.e. on the market for retail supply of electricity in 
Belgium, only ENGIE is active, with a market share of approx. [40- 50]% for large 
industrial and commercial customers,41 [40-50]% for small industrial and 
comm ercial customers,42 and [40- 50]% for households in 2018.43  
(A) No input foreclosure  
(50) The Parties submit that these markets are affected  only technically , since the vertical 
link is purely potential : they confirm ed that they do not foresee that the JV will sell 
to electricity retailers  at all (the JV will sell either to wholesalers or to industrial and 
commercial final customers).44 In any event, basing  the competitive analysis of 
vertical relationships for the affected markets on the assumption that the JV could 
sell its output to electricity retailers, the Parties submit that the proposed transaction 
does not lead to an input foreclosure risk in the Be lgian market.  
(51) The Commission considers that the proposed transaction w ould not lead to an input 
foreclosure risk, since the Parties will neither have the ability nor the incentive to 
foreclose rival electricity retailers in Belgium. 
                                                 
41  Form CO, Table 19.  
42  Form CO, Table 20.  
43  Form CO, Table 21. See also footnote 21 above for ENGIE’s market shares on a regional level within 
Belgium.  
44  Form CO, paragraphs 205- 206. 
 
 
11 (52) First, the proposed transaction would not fundamentally alter the current market 
structure and the Parties’ competitive position and incentives. ENGIE already holds  
a minority  interest in the offshore site Seamade in Belgium that it will contribute  to 
the JV.45 The vertical link with respect to ENGIE  downstream is therefore pre-
existing, and is not affected by the proposed transaction.  
(53) Second, w ith regard to EDP (which is the new element in the vertical link), its  
market share in Belgium at the upstream lev el (i.e. in the national markets for 
generation and wholesale supply of electricity) is  negligible, and w ill remain low 
after the proposed transaction. 
(54) Third , at the downstream level, i.e. on national markets for the retail supply of 
electricity, only ENGI E is currently active. EDP is not active downstream and 
therefore, regardless of its competitive position upstream, it will have no incentive to 
allow the JV to foreclose electricity retailers from the JV’s output, since that would 
imply a pure profit loss  (not compensated by benefits from a hypothetical expansion 
at the downstream level, which would only benefit ENGIE).  The creation of the JV 
would if anything reduce  their incentives to foreclose rival retailers from electricity 
sourcing.  
(55) Fourth, the JV w ould hold a minority share in  less than 4%  of installed capacity  in 
Belgium  (the JV’s offshore wind farm is under construction, and therefore has no 
electricity output yet).46 The proposed transaction w ould not enable the Parties to 
foreclose rivals . Even if  the Parties decided not to sell any of the JV’s output to third 
parties, electricity purchasers would have access to other supply sources since the JV 
accounts only for a very minor part of the electricity generated in Belgium . 
(56) Finally, t he predominant view among the respondents of the market investigation 
suggests that the proposed t ransaction will not have an y impact,47 and the 
Commission did not receive any substantiated complaint.  The majority of customers 
also mentioned possible alternative retail electricity suppliers, such as EDF Luminus, 
Lampiris , RWE  and Axpo.48 
(57) The Commission therefore considers that the proposed transaction does not raise 
serious doubts about its compatibility with the internal market as the Parties will 
have neith er the ability nor the incentive to foreclose rival electricity retailers in 
Belgium.  
(B) No customer foreclosure  
(58) The Parties submit that post-transaction they w ould neither have the ability nor the 
incentive to foreclose customers as a result of the proposed transaction. They stress 
in particular that there w ould remain sufficient alternative players in the market for 
the retail supply of electricity for the JV’s competitors to sell their electricity output. 
In addition, they point out that the Parties’  market  shares in the retail supply of 
electricity have  been decreasing at a steady rate in the last few year s in view of new 
                                                 
45 Form CO, Table 3.  
46  Form CO, paragraph 190.  The Parties also expect  that the ir market shares will decrease in the next few 
years.  
47  See footnotes 30 and 31. 
48  Replies to question 7 of Questionnaire to retail customers in Belgium.  
 
 
12 entrants on these  market s. ENGIE’s market share declined from [40- 50]% in 2016 to 
[40-50]% in 2017.49 
(59) Moreover , the JV w ould have, in term s of installed capacity, market shares of less 
than 4% in Belgium. Even if ENGIE bought all the electricity produced by the JV, it 
would still need to buy significant volumes from other sources, given its downstream 
market share (hence the volume of input that it require s). 
(60) The predominant view among the respondents of the market investigation suggests 
that the proposed t ransaction w ould not have an y impact  on the market,50 and the 
Commission did not receive any substantiated complaint.  
(61) The Commission’s position is therefore that the proposed transaction w ould not lead 
to customer foreclosure risks, since the Parties w ould neither have the ability nor the 
incentive to foreclose rival electricity generators and wholesalers in Belgium.  
4.2.2.2. The generation and wh olesale (upstream) and retail (downstream) sale of electricity  
in Portugal  
(62) In Portugal , three vertically affected markets arise because of the activities of EDP, 
ENGIE and the JV upstream in the market for electricity generation and wholesale 
supply of ele ctricity, and  EDP’s presence downstream in:  
(a) The market for the retail supply of electricity to large industrial and 
commercial customers ,  
(b) The market for the retail supply of electricity to small industrial and 
commercial customers , and  
(c) The market for th e retail supply of electricity to households . 
(63) At the upstream level, i.e. on the market for electricity  generation and wholesale 
supply  of electricity in Portugal, in 2018 EDP had a market share of [40- 50]% (in 
terms of generation) and of [50- 60]% (in term s of installed capacity), while ENGIE 
had a market share of [5 -10]% (in terms of generation) and of [5 -10]% (in terms of 
installed capacity). The JV had a market share of [0 -5]% (in terms of generation) and 
of [0-5]% (in terms of installed capacity). The combined market share at the 
upstream level was therefore relatively high at [50-60]% (in terms of generation) 
and [60- 70]% (in terms of installed capacity), but with the JV representing less 
than [0-5]% (in terms of installed capacity) and [0 -5]% (in terms  of generation).51 
(64) At the downstream level , i.e. on the market for retail supply of electricity in 
Portugal, only EDP is active, with a market share of approx. [20- 30]% for large 
industrial and commercial customers, [40- 50]% for small industrial and commercial 
customers, and [80- 90]% for households in 2018.52  
                                                 
49  Form CO, paragraph 226.  
50  See footnotes 30 and 31. 
51  Form CO, Table 16 (installed capacity) and Table 17 (generation).  
52  Form CO, Table 26.  
 
 
13 (A) No input foreclosure  
(65) The Parties submit that these markets are affected only technically, since the vertical 
link is purely potential: they confirmed that they do not f oresee that the JV w ould 
sell to electricity retailers at all (the JV w ould sell either to wholesalers or to 
industrial and commercial final customers).53 In any event, basing the competitive 
analysis of vertical relationships for the affected markets on the assumption that the 
JV could sell its output to electricity retailers, the Parties submit that the proposed 
transaction would not lead to an input foreclosure risk in the Portuguese market.  
(66) The Commission considers that the proposed transaction will not  lead to an input 
foreclosure risk, since the Parties w ould neither have the ability nor the incentive to 
foreclose rival electricity retailers in Portugal.  
(67) First, the proposed transaction would not fundamentally alter the current market 
structure and the Parties’ competitive position and incentives. T he Portuguese 
offshore site that ENGIE and EDP  will contribute  to the JV , WFA, is already 
partially jointly owned by EDPR (54.4% shareholding) and ENGIE (25% 
shareholding).54 The vertical link with respect to EDP downstream is therefore pre -
existing, and is not affected by the proposed transaction. 
(68) Second, ENGIE’s Portuguese market shares upstream are small,  and will remain low 
after the proposed tran saction.55  
(69) Third, ENGIE is not active downstream and therefore, regardless of its competitive 
position upstream, it will have no incentive to allow the JV to foreclose electricity 
retailers from the JV’s output, since that would imply a pure profit loss (not 
compensated by benefits from a hypothetical expansion at the downstream level, 
which would only benefit ENGIE). The creation of the JV w ould if anything reduce  
their incentives to foreclose rival retailers from electricity sourcing.  
(70) Fourth, the JV would hold shares representing less than 1% of the installed capacity 
in Portugal.56 The proposed transaction will not enable the Parties to foreclose rivals . 
Even if the Parties decided not to sell any of the JV’s output to third parties, 
electricity purchasers  would have access to other supply sources since the JV 
accounts only for a very minor part of the electricity generated in Portugal.  
(71) Finally, the predominant view among the respondents of the market investigation 
suggests that the proposed transaction w ould not have any impact,57 and the 
Commission did not receive any substantiated complaint.  
(72) The Commission therefore considers that the proposed transaction does not raise 
serious doubts about its compatibility with the internal market as the Parties will 
have neither the ability nor the incentive to foreclose rival electricity retailers in 
Portugal.  
                                                 
53  Form CO, paragraphs 205- 206. 
54  Form CO, Table 3.  
55  Form CO, paragraph 186.  
56  Form CO, paragraph 176.  
57  See footnotes 37 and 38. 
 
 
14 (B) No customer foreclosure  
(73) The Parties submit that they w ould neither have the ability nor the incentive to 
foreclose customers as a result of the proposed transact ion. They stress in particular 
that there will remain sufficient alternative players in the market for the retail supply 
of electricity for the JV’s competitors to sell their electricity output. In addition, they 
point out that the parents’  market shares i n the retail supply of electricity have  been 
decreasing at a steady rate in the last few year s in view of new entrants on these  
market s. EDP’s market share in the downstream market in Portugal dropped from 
[40-50]% in 2016 to [40-50]% in 2018.58 
(74) Moreover , the JV w ould have, in terms of installed capacity, market shares of less 
than 1%  in Portugal . Even if EDP bought all the electricity produced by the JV, they 
would still need to buy significant volumes from other sources, given its downstream 
market shares (hence the volume of input that EDP require s). 
(75) The predominant view among the respondents of the market investigation suggests 
that the proposed t ransaction w ould not have an y impact ,59 and the Commission did 
not receive any substantiated complaint.  
(76) The Commission’s position is therefore that the proposed transaction will not lead to 
customer foreclosure risks, since the Parties w ould neither have the ability nor the 
incentive to foreclose rival electricity generators and wholesalers in Portugal.  
5. CONCLUSI ON 
(77) 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 Agreement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Re gulation and Article 57 of the EEA Agreement .  
For the Commission 
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice -President  
                                                 
58  Form CO, paragraph 226.  
59  See footnot es 37 and 38.