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, 26.2.2019  
C(2019 ) 1711 final  
 PUBLIC VERSION  
 
To the notifying party  
Subject : Case M .8871  – RWE /E.ON Transfer Assets  
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 22 January 2019, the European Commission received notification of a 
proposed concentration pursuant to Article 4 of the Merger Regulation (the 
“Concentration ”) wher eby RWE  AG (“RWE”, Germany)  acquires, within the 
meaning of Article 3(1)(b) of the Merger Regulation, joint or sole control o ver 
certain generation assets of E.ON SE (“E.ON”, Germany).    
(2) The Concentration is accomplished by way of purchase of assets and s hares.3 The 
E.ON generation assets that are part of the Concentration  (the "E.ON Assets")  
include the following entities and shares in entities: E.ON Climate & Renewables 
GmbH (Germany), Amrum Offshore West GmbH (Germany), E.ON Climate & 
Renewables UK Limi ted (UK), E.ON Climate & Renewables North America, 
                                                 
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 introd uced 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 038, 31.01.2019 , p. 22. 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information omitted has been replaced by 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 LLC (USA), E.ON Wind Sweden AB (Sweden), E.ON Climate & Renewables 
Italia S.r.l. (Italy). In addition, RWE will acquire 60 .08% in Rampion NewCo 
(UK), which holds 50% of Rampion Offshore Wind Limited (UK ), thereby 
acquiring an indirect stake of 30 .1% in Rampion Offshore Wind Limited.  Next to 
these renewable assets, RWE will also acquire from E.ON interests  and 
associated drawing rights  in nuclear assets, which encompass a […]* % minority 
interest in Kernkraftwerke Lippe -Ems GmbH ( “Emsland”, Germany ), a 25% 
minority interest in Kernkraftwerk Gundremmingen GmbH ( “Gundremmmingen 
C”, Germany) and 25% co -ownership share of nuclear fuel and waste as well as 
real estate related to the Gundremmingen nuclear p ower plant.4 
(3) The Concentration  is part of a complex asset swap between RWE and E.ON. In a 
separate case (Case M.8870), E.ON notified  to the Commission the proposed 
acquisition of sole control over the distribution and retail energy business , as well 
as som e production assets , of Innogy SE (“Innogy”, Germany) . Innogy is 
currently controlled by RWE and RWE will keep a large part of Innogy’s 
generation assets. As partial consideration for E.ON’s acquisition of Innogy, 
RWE will also receive a 16. 67% interest  in E.ON ’s share capital .  
(4) RWE  is referred to as  “Notifying Party ” and, together with the E.ON Assets, as 
the “Parties ”. 
1. THE PARTIES  
(5) RWE is an energy company active across the supply chain, including generation, 
wholesale supply, transmission, distribution, retail supply and energy -related 
customer solutions  (such as metering, e -mobility, etc.). RWE and its subsidiaries, 
including Innog y, are active in several European countries, including Czechia, 
Belgium, France, Germany, Hungary, Italy, Luxembourg, The Netherlands, 
Poland, Romania, Slovakia and the UK.  Following the completion of the asset 
swap, RWE will, however, cease to be active  in distribution, retail supply and 
energy -related customer solutions .  
(6) The E.ON  Assets  cover essentially all of E.ON’s current renewable energy 
generation business5 and the minority stakes currently held by E.ON in the RWE -
operated and majority owned nuclea r power plants of Gundremmingen C and 
Emsland . 
2. THE CONCENTRATION  
(7) Both RWE and E.ON are currently active across the whole electricity supply 
chain, from generation and wholesale to distribution and retail of electr icity (and, 
to a lesser extent, also of gas ).  
                                                 
* Should read: “12.5”.  
4  In both Emsland and Gundremmingen C, RWE is the other shareholder and operates the nuclear 
plants prior to this Concentration.  
5  E.ON’s electr icity generation business (in particular from coal, lignite, gas and water as well as 
Swedish nuclear power plants) and E.ON’s global commodities trading business was spun -off into 
Uniper SE (Uniper), which was subsequently acquired by Fortum. The Commissi on has cleared that 
acquisition by decision of 15 June 2018 (Case COMP/M.8660 – Fortum / Uniper) . 
 
3 (8) Following the asset swap  (as set out in paragraph 3 of this Decision) , RWE will 
be primarily active in the upstream electricity (and gas, to a more limited extent) 
generation and wholesale markets whereas E.ON will focus on the distribution 
and retail of electricity and gas (and related services).  
(9) The two parts of the asset swap constitute two separate concentrations.6 This 
decision concerns RWE’s acquisition of E.ON’s generation assets,  whilst E.ON’s 
acquisition of RWE’s distribution and retail busine ss, as well as some production 
assets currently operated by Innogy,  will be assessed under Case M.8870.  
3.  EU DIMENSION  
(10) The undertakings concerned have a combined aggregate worldwide turnover of 
more than EUR 5 000 million7 [RWE: EUR [>40 billion] ; E.ON Assets: EUR [>1 
billion] ]. Each of them has an EU -wide turnover in excess of EUR 250 million 
[RWE: EUR [>40 billion] ; E.ON Assets: EUR [>1 billion] ] but they do not 
achieve more than two -thirds of their aggregate EU -wide turnover within one and 
the same Member State.  The notified operation therefore has a n EU dimension . 
4. MARKET DEFINITION  
(11) Both RWE and E.ON Assets own and operate electricity generation assets in 
several European (and non -European) countries. RWE’s and E.ON Assets’ 
activities overlap in  the generation and wholesale supply of electricity , mainly in 
Germany and the UK.8   
(12) In addition, the  overall Transaction  results in two vertical links9 between the 
generation and wholesale supply of electricity  and: 
(a) The retail supply of electricity: by virtue of the 16. 67% minority share that RWE 
will acquire in E.ON there would be a structural (vertical) link  between RWE ’s 
upstream activities and E.ON ’s downstream activities.  
(b) The e lectricity transmission: RWE jointly (together with Commerz Real AG ) 
controls Amprion  GmbH , one of the four German transmission system operators 
                                                 
6  Commission Consolidated Jurisdictional Notice [2008] O. J. C95/1 , para. 41 : “…several transactions, 
even if linked by condition upon each other, can only be  treated as a single concentration, if control is 
acquired ultimately by the same undertaking(s). … This excludes…assets swaps ”.  
7  Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission  
Consolidated Jurisdictional Notice (OJ C  95, 16.4.2008 , p. 1).  
8  The Parties’ activities also overlap in France, Italy and Poland , but in these countries the Parties have 
a minimal presence. In France, E.ON Assets have no operational units. An overlap between the 
Parties' activities will only materialise once the construction of two E.ON offshore projects is 
completed but in any case  RWE's market share would remain below [0-5]%. Similarly, in Italy and 
Poland, the Parties´ combined market share is well below [0-5]%. In all markets, the increment would 
be lower than [0-5]%.  
9  Both Parties are active in  the trading of CO2 allowances ( see M.8660 – Forum/Uniper, section 4.5). 
However , the Transaction does not give rise to horizontally or vertically affected markets  in respect of 
CO2 allowances and no concerns were raised in the market investigation. For these reasons, these 
products will  not be further discussed in this Decision.  
 
4 (TSOs).10 While  the vertical link between transmission and generation/wholesale 
supply is pre -existent, the Concentration  might theoretically modify  RWE's 
position in the market for gen eration and wholesale supply and affect its ability or 
incentives to carry out  foreclosure strategies.  
4.1. Generation […]* wholesale supply of electricity  
4.1.1 Product market definition  
(13) The Commission has – with regard to regulatory regimes applicable in othe r 
geographic areas – a consolidated case practice  of defin ing the market for the 
generation and wholesale supply of electricity as encompassing the trading on the 
wholesale market of the generated electricity within a certain geographic market 
as well as t he electricity that is physically imported into this geographic market 
via interconnectors, irrespective of the source of generated electricity (such as 
nuclear, lignite, wind, solar, etc.).11 This market de finition  is not disputed by the 
Notifying Party.  
(14) The Commission notes that the Bundeskartellamt (Federal Cartel Office, “FCO ”) 
has typically  considered a separate market  for renewable -based generation that 
benefits from public subsidies under the German Renewable Energ ies Act 
(Erneuerbare Energien Gesetz , “EEG ”).12 The FCO bas es its view on the fact that 
whilst renewable  generation  under the EEG exert s competitive pressure on 
conventional generation (such as nuclear, lignite, gas), conventional assets exert 
very limited competitive pressure on renewables  falling under the EEG. This is 
because the subsidies  under the EEG  make renewable s significantly less costly  
than any other technologies  and as such, will always be offered to the market 
place first . As the way in which renewables generation is remunerated develops, 
this may change in the future.  
(15) The Commission considers that in this particular case the market definition can 
ultimately be left open as no competition concerns would arise  whether the 
market is defined as encompassing both conventional and renewable generation 
falling under the EEG or whether a separate market were to exist for conventional 
generation (including renewables not covered by the EEG -scheme) on the one 
hand and renewable generation falling under the EEG  on the other .  
(16) In the past the Commission  has also considered a segmentation between 
wholesale supply,  on the one hand,  and balancing and  ancillary services13, on the 
other hand .14 The Commission considers that in th is particular case the market 
                                                 
10  Amprion operates a transmission network with a length of about 11,000 km in the German states of 
North Rhine -Westphalia, Lower Saxony, Hesse, Rhineland -Palatinate, Saarland, Baden -
Wuerttemberg, and Bavaria.  
* Should read: “and”.  
11  See e.g. Case M.8687 – Prisko / OKD Nastupnicka, paras. 55 seq ; Case M.7850 – EDF / CGN / NNB 
Group of Companies, para. 54; Case M.8660  – Fortum/Uniper, paras 18 and 26 .  
12  See e.g. B4-80/17 – EnBW / MVV, para. 93 . 
13  Balancing powe r is needed to maintain the appropriate tension level in the grid; on this market TSOs 
typically purchase electricity in order to cover deviations between production and consumption within 
their relevant control areas.  
14  COMP/M.6225 Molaris / Commerz Real  / RWE / Amprion, of 23 August 2011; COMP/M.5467 
RWE / Essent, of 23 June 2009; COMP/M.3268 Sydkraft / Graninge, of 30 October 2003 . The 
 
 
5 definition can ultimately be left open as no competition concerns would arise 
even if a separate market for balancing and ancillary services  was defined .  
4.1.2 Geographic market definition  
(17) The Commission has generally  defined  the market for the generation and 
wholesale supply of electricity a s national in scope .15 However, the Commiss ion 
has also recognised that in some instances the presence of a sufficiently large 
interconnection capacity between Member States  may justify broaden ing the 
geographic scope of the market .16 This could also be the case if two Member 
States belong to the same bidding area.  
(18) In the case of Germany, Germany belongs to the same bidding area as 
Luxembourg. As such, these two countries should be defined  as belonging to the 
same geographic market.  
(19) As regards Great Britain , the Commission considers that the relevant geographic 
market comprises the whole of Great Britain .17 However, as the Concentration  
does not result in an affected market in Great Britain  for the generation and 
wholesale of electricity, Great Britain will not be discussed further in this 
Decision.18 
(20) For the purpose of this  Concentration , it can be left open whether , as a result of 
interconnection capacity, the geographic market should be de fined as wider […]*  
the German and Luxembourg  bidding area , as the Concentration does not raise 
any competition concerns under the narrowe r definition . For practical reasons,  
related to availability of data, the fact that production in Luxembourg is limited 
and the fact that E.ON Assets comprise no assets located in Luxembourg , and as 
such, the increment caused by the Concentration  is not affected, the competitive 
assessment has been ca rried out based on German production data alone .  
                                                                                                                                                 
Commission has also considered possible narrower segmentations of the balancing market depending 
on the nature and purp ose of the balancing services. For example, the Commission considered the 
following possible sub -segments of the balancing market ( COMP/M.5978 – GDF Suez/In ternational 
Power): (i) Frequency Reserve, (ii) Standing Reserve, (iii) Fast Reserve and (iv) Contin gency 
Reserve.  
15  See cases COMP/M.5979 – KGHM/TAURON Wytwarzanie/JV, para. 24; COMP/M.5711 – 
RWE/Ensys, para. 21; COMP/M.4180 – GDF/Suez, para. 726 
16  See e.g. COMP/M.3268 – Sydkraft/Graninge , para. 27; COMP/M.3868 – DONG/Elsam/Energi E2 , 
paras. 258-260.   
17  See C OMP /M.5224 - EDF / B ritish  Energy . In past decisions related to the UK market, the 
Commission considered  that no distinction should be made on the basis of the source of electricity.   
There  is no indication that this definition is no lo nger valid.  
18  In Great Britain, RWE currently has a market share of [10-20]% (based on 2017 production) and 
E.ON Assets account for only [0-1]% of Great Britain production. The combined market share would 
be [10-20]%. EDF is the largest electricity supplier with a 24% share of generation output. Other 
significant players include: Centrica (5%), Drax (7%) and SSE (8%). In its recent inquiry into the 
energy sector the UK Competition and Markets Authority (CMA) analysed the competition in the 
electricit y wholesale market and concluded that no generator has unilateral market power in Great 
Britain.  
* Should read: “than”.  
 
6 4.2. Transmission of electricity  
(21) In the past the Commission has consistently considered each electricity  
transmission  network as a separate relevant product market whose geographic 
scope coincides with the area covered by the transmission grid. Each TSO  has 
been accordingly considered as a monopolist on its own network.19  
(22) In line with its previous case -law, the Commission considers that the network 
operated by Amprion  constitutes a separate relevant prod uct and geographic 
market.  
4.3. Retail supply of electricity  
(23) The Commission has typically identified different product markets  for the retail 
supply of electricity  depe nding on the type of customers , mainly distinguishing 
between : households , SMEs and large in dustrial customers . The geographic scope 
for each  customer group  has generally been considered to be national, although 
for some countries, including Germany, the Commission has in the past 
considered regional or even local markets.20  
(24) For the purpose of th is decision, the exact definition of the (product and 
geographic) market can be left open because the Concentration  does not raise 
competition concern s under any plausible market definition .21  
5. COMPETITIVE ASSESSMEN T 
A. Horizontal overlaps  
5.1. Generation  and wholesale supply of electricity in Germany22 
5.1.1.  Market  structure  
(25) The German market for generation and wholesale supply of electricity is 
characterised by a large number of generators  and a broad energy mix.  In addition 
to the largest national players  (the Parties , Vattenfall, EnBW, Fortum/Uniper and 
LEAG), there are several smaller  companies , often municipal/regional utilities.  
(26) According to the FCO and the German Federal Network Agency  
(Bundesnetzagentur , "BNetzA" ), the level of concentration has been  continuously  
decreasing for the last years . The combined share  of conventional  supply of the 
                                                 
19 See e.g. COMP/M.5827 – ELIA /IFM/50Hertz, para 21; COMP/M.5707 - TENNET/ E.ON , paras 6 -7. 
20  See COMP/M.6225 Molaris / Commerz Real / R WE / Amprion; COMP/M.5827 – ELIA/ IFM/ 
50HERTZ, para 24.; COMP/M.5496 - VATTENFALL / NUON ENERGY .   
21  The markets for the retail supply of electricity are only relevant for the assessment of a vertical link 
created by the minority shareholding that RWE ta kes in E.ON. The assessment of the effects of that 
minority shareholding is not depend ent on the exact downstream product market definition.  
22  As discussed in the market definition section, the geographic scope of the market is likely to include 
Luxembou rg along with Germany. However, as generation is limited and there are no overlapping 
activities in Luxembourg, in the remainder of this Decision the assessment is focused on the 
generation and wholesale supply of electricity in Germany.  


 
9 5.1.2.   The increment created by the Concentration  
(30) The E.ON Assets generated  […] TWh in 2017 ,32 of which […] TWh comes from 
E.ON's  drawing rights in the nuclear plants Gundremmingen C and Emsland . 
Gundremmingen C must, however, be decommissioned by 31 December 2021 
and Emsland  must be decommissioned  by 31 December 2022 . The remainder of 
the E.ON Assets’ consist of eight wind farms (offshore and onshore) , one of 
which is still in construction.33 
(31) The increment in RWE's share caused by  E.ON Assets is limited and amounts to 
only [0-1]% ([0-1]% nuclear and [0-1]% renewable  generation ) of the German 
generation  output  (if conventional generation and renewable generation under 
EEG were considered separat ely, the increment would be  [0-1]% for conventional 
and [0-1]% for renewable) . 
(32) In reality,  however,  upon completion of the asset swap, the actual increment 
would be even smaller.34  
(33) Whilst RWE would retain most of Innogy's generation assets, some of Innogy' s 
generation assets will be transferred to E.ON on a permanent basis ("Reverse 
Carve -Out Assets")  as part of the asset -swap .35 These assets are held by entities 
(namely regional entities such as enviaM) within the Innogy Group which are 
mostly not wholly -owned by Innogy. The Notifying Party submits that  retaining 
these assets was based on "practical  considerations. Given the very tight 
timeframe of the negotiations for the Transaction  and taking into account that 
these assets do not belong to th e core renewables business  of E.ON and Innogy, 
RWE and E.ON decided that the efforts required for carving -out the relevant 
assets would outweigh the potential benefits. " 
(34) The Reverse Carve -Out Assets include a large number of units, m any of them 
with a very  small generation  capacity (less than 1 MW).  The volume produced by 
these assets in 2017  (attributable to Innogy  proportionally to its share in the se 
generation assets ) amounts to […] TWh, of which […] TWh  are from 
conventional sources and […] TWh from ren ewables . When  production from the 
Reverse Carve -Out Assets is deducted from the production attributable to RWE 
post-completion of the asset swap , the net increment drops to  […] TWh , which 
represent s a [0-1]% share of the German generation  output (of which [0-1]% is 
                                                 
32  An offshore plant (Arkona) has come online as of early 2019 and therefore its production is not 
reflected in the 2017 figure. Arkona has a generation capacity of […] MW and E.ON owns (and 
would transfer to RWE) a share of 50% in the plant ( […] MW). Assuming that the plant runs 
approximately 40% -50% of the time in line with the production rate of Amrumbank  West (which is 
one of the other offshore wind farm assets that would be transferred to RWE and is similar in size to 
Arkona ( […] MW)), Arkona’s annual production would amount to approximately […] TWh.  
33  Delta Nordsee.  
34  The agreements covering the tran sfer of the E.ON Assets to RWE are conditional on the closing of 
the Innogy acquisition by E.ON, which thereby will either temporarily (see footnote 3 5) or 
permanently acquire control over the Reverse Carve -Out Assets  (compare para 3 3). 
35  E.ON will temporarily acquire all of Innogy's assets as part of the concentration M.8870 – 
E.ON/Innogy . Most of Innogy's generation assets will then be re -transferred back to RWE in a second 
step of the asset swap. However, part of Innogy's generation asse ts will remain with E.ON.  According 
to the Parties, this structure and sequence of transfers is necessary as it is too complicated to carve up 
Innogy under its current corporate structure.  
 
10 renewable and [0-1]% is conventional production ).36 If non -EEG conventional 
generation and renewable generation under EEG were to be considered separate 
markets, the net increment would be [0-1]% for non -EEG conventional and [0-
1]% for renewable.  
(35) Moreover, t he Commission notes that t he aforementioned net increment is 
approximately of the same amount as the production associated with the minority 
shares in the nuclear assets transferred to RWE ( […] TWh ). This implies that the 
actual increment caused  by the Concentration  is only temporary  in nature , as it 
would largely disappear once  the nuclear assets are phased out  by end of 2022 .  
5.1.3.  The subsidy scheme for renewable assets  
(36) The EEG  governs the financial support granted to renewable assets . There are two 
different subsidy schemes for renewable assets:  
(a) direct selling with a market premium: under this scheme, the EEG plant operator 
sells electricity in the wholesale market via the  same  channels as electricity 
produced from conventional sources  (on exchanges or bilaterally OTC). In 
addition to the income from the sale of electricity on the market, the EEG plant 
operator receives a market premium from the TSO .37  
(b) feed-in tariff: this scheme is only available to existing plants, or new plants with a 
capacity of up to 100 kW. Under this scheme, the EEG plant operator passes its 
power on to the TSO  and receives a feed -in tariff set by law. The TSO  acts as a 
wholesaler and sells the electricity in the market.  
(37) Under the 'direct selling' scheme the marke t premium is determined as the 
difference between a fixed tariff level (“anlegbarer Wert”) and an average 
wholesale price which is energy -source specific  ("monthly reference wholesale 
price") . Initially, the market premium (EEG 2014) was calculated as the 
difference between a legally determined tariff level and the average monthly 
energy -specific wholesale price. However, since 2017 (EEG 2017) the tariff 
levels for most technologies have been determined through a market -based 
auction scheme (competitive ten ders) conducted by the BNetzA.  
(38) The remuneration structure for direct selling is such that an increase in the 
wholesale price typically generates two opposing effects on the renewable 
operators' revenue. On the one hand, it increases the income that the EEG  
operator gets from the market. On the other hand, it tends to increase the monthly 
reference wholesale price and therefore reduce the market premium.  
(39) [Most of] E.ON renewable units which are part of E.ON Assets are remunerated 
under the "direct selling w ith a market premium" scheme . [Most of] renewable 
assets in operation were commissioned prior to 1 January 2017 and therefore they 
are remunerated on the basis of EEG 2014.  
                                                 
36   In terms of installed capacity, the net increment amounts to ap proximately […] MW which represents 
approximately [0-1]% of the German installed capacity . 
37  At present, about 78% of the electricity produced under the EEG is sold by direct selling with a 
market premium . 
 
11 5.1.4.  The Notifying Party's view  
(40) The Notifying Party submits that the horizontal overlap resulting from the 
Concentration  will not raise competition concerns  in respect of the generation and 
wholesale of electricity in Germany ( the only affected market) .  
(41) First, the  combined market shares will remain low post -Concentration . Second, 
the increment is minimal . Third, t here are several competitors (both large and 
small) active in the German electricity generation and wholesale market and as 
such, post-Concentration , customers will continue to have access to a wide 
variety of alte rnative providers . This applies even when the assessment is made 
on narrower market segmentations ( i.e. separately for conventional generation 
and renewable generation falling under the EEG ). 
(42) In support of its arguments that the Concentration  will not rais e any competition 
concerns, the Notifying Party submitted a “residual supplier index” (RSI) 
analysis . The results of  this RSI analysis  indicate that the Concentration  will not 
increase the extent to which RWE is pivotal to meet demand . The Concentration  
is therefore unlikely to materially enhance RWE's ability to influence prices i n the 
wholesale German market.  
5.1.5.  The Commission's assessment  
(43) For the reasons set out below, the Commission considers that the Concentration  
does not raise competition concerns on th e market for the generation and 
wholesale of electricity in Germany and Luxembourg . As explained already in the 
geographic market definition, for practical reasons related to availability of data, 
the fact that production in Luxembourg is limited and giv en that E.ON Assets 
comprise no assets in Luxembourg (meaning the increment is not affected), the 
competitive assessment has been  carried out based on German production data 
alone.    
(44) First, a s explained in section 5.1.2.  above , the net increment created by the 
Concentration  is very limited  and it is only temporary in nature as it will 
disappear once the nuclear generation plants will go off-line ( Gundremmingen C 
by 31 December 2021 and Emsland by 31 December  2022).  
(45) Second , even  if renewables under EEG and conventional generation were to be 
considered separate markets, the merge d entity ’s share and in particular the 
increment  brought about by this Concentration would be low. In renewable 
generation, the Parties have a very small combined market share of only [0-5]%. 
In conventional generation , while RWE is the largest supplier  in Germany ( [30-
40]%), the net increment is limited ([0-1]%) and in any event entirely caused by 
nuclear assets which  will have to be decommissioned latest by the end of 2022.  
(46) Third , even if a separate market for balancing power and ancillary services were 
to be considered , the increment created by this Concentration is very limited and 
temporary in nature.  As explained in paragraph (2) above, the E.ON Asset s being 
acquired consist of renewable and nuclear generation assets. Renewable 
generation such as wind are normally not used for balancing purposes. Whilst 
nuclear can be used for balancing purposes, it needs to be pre -qualified for this. 
Out of the two pl ants in which RWE acquires E.ON's minority stakes and drawing 
rights, Emsland is pre -qualified for primary and tertiary reserve  but RWE already 
 
12 holds the majority shares of […]* % in Emsland  as well as 100% of the marketing 
rights for reserve energy .38 Gundr emmingen C is pre -qualified for primary 
reserve (for a capacity of 37 MW ), but has never participated in auctions for 
primary reserve  and the Parties submit that there is no plan to seek additional 
qualification as the plant will be decommissioned by 2021.39  
(47) The Commission therefore considers that prima facie  the limited  and in any event 
temporary  nature of the  increment is unlikely to materially strengthen RWE's 
market power in the German electricity generation and wholesale  supply  (whether 
the market is defined as comprising all generation or segmented between 
conventional generation and renewables generation covered by the EEG  and 
whether or not a separate market for balancing power is defined ).  
(48) However, due to the  functioning of the electricity wholesa le markets , even 
companies with a relatively small market share  may be able t o influence the 
wholesale price  under  some circumstances. The Commission has therefore  
assessed  whether , despite the small size of the increment,  the Concentration  could 
affect RWE's ability and incentives  to influence market prices .  
Risk of withholding strategies  
(49) In electricity markets, a relatively common strategy that suppliers can adopt to 
influence the wholesale price entails  withholding part of their production.  By 
withholding ( either physically or economically)40 electricity generators  can shift 
the merit order curve to the left  and this way can trigger a price increase.  
(50) These strategies require the combination  of flexible generation (which can be 
technically withhe ld) and baseload  production (which would remain operational 
and therefore would benefit from the resulting higher prices ). These strategies are  
ultimately intended to influence the wholesale price that all generation units (with 
the exception of units unde r the 'feed-in tariff'41 regime) receive . When assessing 
the incentives of withholding capacity,  it may, therefore, be informative  to look 
at the entirety of the assets acquired by RWE together, as opposed to consider 
separately renewable and conventional capacity.  
(51) RWE’s generation portfolio in Germany  is a mix of baseload ( e.g. nuclear, lignite , 
renewable) and flexible (for example, coal and gas -fired)  capacity  and may thus 
be suited for withholding  strategies . The Commissio n, however,  considers that the 
additional capacity acquired by RWE does not materially enhance its ability 
and/or incentives to withhold capacity.  
                                                 
* Should read: “87.5”.  
38  This is based on contra ctual agreements [between RWE and E.ON]  […]. 
39  The Notifying Party submits that , although RWE has pre -qualified base -load power plants in the past 
for the provision of electricity  reserve […], today this would not  make commercial sense because  
[…]. 
40  Physical withholding entails a reduction in generation output offered to the market, whereas economic 
withholding entails an increase in unit prices while keeping output constant. The outcome is 
essentially the same, namely that less production is availabl e at competitive price level. Thus, in a 
situation where generators bid supply functions, physical and economic withholding converge. Hence, 
the remainder of this Decision refers to withholding in general as encompassing both types of 
strategies.   
41  See paragraph (36). […]. 
 
13 (52) Regarding the ability to withhold , the increment brought by the Concentration  
includes  wind -based generation. Although this technolog y is technically flexible , 
it is low-cost42 and as a consequence tends to position on the left end of the merit 
order curve  (see figure below). These types of units are the most costly to 
withhold as they are the most profitable  to operate . 
Figure 1: Illustrative  example of the German merit order based of installed capacity  
 Source: Form CO, figure 1.1  
(53) In response to the market investigation, electricity generators confirm ed that 
renewable plants are typically run at full capacity and that withholding 
renewables,  while technically possible, would only make  economic  sense  in the 
rare circumstances when  the wholesale prices are negative. For example, one 
competitor noted " Wind farms can be marketed on the tertiary control market if 
some technical hurdles are overcom e but this is far from being economically 
beneficial compared to market premium model. So in general, […]*  run at full 
possibly  load." Along the same lines, other suppliers  said that " typically wind 
farms produce always as much as possible (depending on wind conditions) ", and 
that "a reduction of wind power generation in response to market conditions is 
only carried out in situations of negative spot prices. "  
(54) The Commission therefore  consider s that the Concentration  does not increase 
RWE’s ability to wit hhold in any material way.  
(55) Even if the merger is unlikely to  increase RWE's ability to withhold , it might in 
theory create  additional incentives to withhold  as nuclear are baseload 
technologies  which if run, would  benefit from an increase in the wholesale price . 
For the reason set out below , the Commission consider s that the additional 
incentives , if any, caused by the Concentration  are unlikely to be material.  
                                                 
42  The subsidy schemes under which most renewable plants are remunerated (including [most of] 
renewable units of E.ON Assets) de facto  lower the production costs and increase the incentives  to 
run renewable units at full capacity whenever physically possible . 
* Should read: “they”.  

 
14 (56) First, as explained in paragraphs (34) and (35), the increment is temporary in 
nature and will disappear by 2021 – 2022 when the nuclear plants will have to be 
shut down. 
(57) Second, of the temporary net increment ( […] TWh), […] TWh is renewable 
wind -based capacity which is remunerated under the 'direct selling' scheme.  As 
explained above, the market premium component of the remuneration 
significantly reduces the extent to which a EEG plant benefits from a price 
increase in the wholesale market and therefore tends to lower (although it does 
not completely remove) the incentives to withhold .43 
(58) Third, even if the conventional part of the temporary increment would fully 
benefit from a price increase, this is truly minimal in size ( […] TWh), [0-1]% of 
German generation output in 2017, and unlikely to cause any material change in 
RWE's incentives to withhold .  
5.1.5.1. Analyses submitted by the Notifying Party and third parties 
(59) In the course of its investigation, the Commission has analysed several RSI 
analyses provided by the Notifying Party and by some third parties. RSI analyses 
are typically used by energy regulators and competition agencies as a preliminary 
indication of market power in electricity wholesale markets .44 
(60) RSI analysis consists in assessing whether a company is pivotal, i.e. whether it is 
indispensable to meet demand. Practically,  the RSI consists of checking, for all 
hours in a given year, if the competitors' capacity is sufficient to serve demand 
were all the capacity of the merged entity to be removed from the market. In its 
decision al […]* , the FCO and the German Monopoly Commission have 
considered that when a supplier is pivotal in more than 5% of the hours this is an 
indication of market power .45  
(61) The Commission considers that while RSI is a useful screening tool to monitor 
the functioning of the electricity wholesale market and to identify possibl e 
problematic areas, it suffers from a number of limitations that should be taken 
into account when reviewing the impact of mergers. For example, a company may 
have the ability (by, e.g. withholding capacity) to influence the wholesale price 
even when it is not pivotal. Likewise, a company may have limited incentives to 
exercise market power even when pivotal, if the residual demand that cannot be 
met by competitors is small .  
(62) While not fully investigated, the RSI is sensitive to a number of modelled input-
factors  which are required to estimate the extent of a supplier's pivotality (e.g. 
capacity from interconnectors, plants’ unavailability, demand projections if 
                                                 
43  Renewable assets would only fully benefit from a price increase if the reference price (computed over 
all production hours of wind in a given month) were to become greater than the legally pre-set tariff 
level .  This appears to be unrealistic considering the current market conditions. 
44  See DG COMP energy sector inquiry, 
http://ec.europa.eu/competition/sectors/energy/2005 inquiry/index en html . 
* Should read: “practice”.  
45  See e.g. Monopolkommission, Energie 2017: Gezielt vorgehen, Stü ckwerk vermeiden,  
Sondergutachten 77, para 105 ; Bundeskartellamt, Sektoruntersuchung Stromerzeugung/Stromhandel 
(2011), p. 99.  
 
15 forward looking, etc.) . The various RSI analyses su bmitted to the Commission 
show some discrepancy in the estimate of RWE's pivotality  in the long -term but 
they all consistently indicate that (i) RWE’s pivotality in the short term (until 
2022) would […]*  significantly below 10%, (ii) the merger would cause , if any, a 
very limited  increment in  RWE's  pivotality  and (iii) in any event, the increment  
would essentially disappear post-nuclear phase out  (by end of 2022) .46  
(63) In addition to the RSI, a third party submitted a simulation model which aims  at 
estimating  RWE's incentives to  withhold to assess whether, and to what extent, 
the merger would make withholding more profitable for RWE. The model finds 
that, in general,  the effects of the Concentration  (in case of withholding 
conventional assets, such as gas -fired  and coal plants)  are very limited .  
(64) Only i n one of the scenarios considered  (based on withholding wind generation)  
by the third party  are the effects relatively larger . This scenario relies on the 
following assumptions: first, that RWE has perfect foresight on  hourly demand 
and supply conditions and it is able to withhold  its renewable production  hour by 
hour. Second, it assumes that RWE , via the minority stake that it would have in 
E.ON post -merger,  would entirely control the conventional productio n assets  that 
would remain with E.ON  post-merger.47 In the Commission's view , however,  
these assumptions are not supported by the facts of the case. First, as explained in 
paragraphs (52) and (54), renewable assets are  not suited for withholding. Second , 
as argued below (see paragraphs (76) and (77)), the minority stake (16.67%) in 
E.ON does not  confer full control to RWE over the day -to-day management of 
E.ON’s retained assets. Moreover , even assuming control, RWE would only 
benefit from any additional profits generated by E.ON' assets proportionally t o its 
(limited) participation in E.ON . 
(65) In light of the above, the Commission considers that the various economic 
analysis submitted ( RSIs and simulation) do not modify the Commission ’s view  
set out in paragraphs (43) to (58) that the Concentration  would  not materially 
change RWE’s ability or incentive to distort competition .   
5.1.6.  Conclusion  
(66) In light of all of the above, in particular given the small and in any event 
temporary nature of the increment, the Commission considers that no serious 
doubts arise as to the compatibility of the Concentration  with the internal market 
regardless of whether the market for the generation and wholesale of electricity in 
Germany  and Luxembourg  is considered as comprising all generation  or 
segmented between conventional and renewables generation falling under the 
EEG.   
                                                 
* Should read: “remain”.  
46  Depending on the complainant, the increment in pivotality ranges from 0.4% to 1.1% in 2017 and 0.7 
to 1.1% in 2019.  
47  Also, the model overestimates the conventional (nuclear) capacity that would re main with E.ON post -
merger.  
 
16 5.1.7.  Additional concerns raised by third parties  
(67) During the investigation, some third parties raised concerns that the 
Concentration  may also have effects in markets other than the generation and 
wholesale supply of electricity in Germany.  
(68) First, some were concerned that, as a result of the Concentration , RWE would 
acquire a competitive advantage in the auction for the allocation of subsidy for 
the development/construction of new renewable assets. In particular, RWE would 
benefit from larger economies of scale in the procur ement of key  input s (such as 
wind turbines, solar panels, etc.)  or services for the construct ion and maintenance  
of renewable plants .  
(69) In the Commission's view, the concern, even if in theory plausible, does not 
appear likely in view of the fact that  (i) the generation from renewable sources in 
Germany is highly fragmented with a large number of p layers  owning generation 
units ; (ii) RWE's share of renewable production is very small ( [0-5]%); and (iii) 
RWE’s share of renewable production would be only marginally increase d ([0-
1]%) by the Concentration .  
(70) Second, one third party questioned whether post -merger , RWE may have the 
incentive to deliberately mis -forecast (e.g. overstate) the expected production 
from renewable sources in the day -ahead market on the expectation that this 
would cause a larger demand for balanc ing services where RWE  would be able to 
profit by selling larger volumes at higher prices in the balancing markets. While 
in theory mis -forecasting strategies can be implemented with any technology, 
renewables are less likely to attract the regulator's att ention as they are by nature 
less predictable.  
(71) In the Commission's view, it is unclear whether this strategy is profitable (the 
possible additional profits would have to more than compensate the costs for 
having caused the deviation) and it would entail s ignificant risks as there is no 
certainty that any deviation in the day -ahead market would necessarily result in 
higher demand for balancing services (because, e .g. unexpected deviations in the 
opposite sense would cancel each other  out). The majority of c ompetitors 
responding to the Commission's market investigation consider that suppliers in 
general have no incentives to mis -forecast the expected production from 
renewable sources.  
(72) In any case, even assuming that this type of strategy is plausible, the 
Concentration  could only have an effect in so far as RWE's renewable capacity 
would materially increase following the merger (so that RWE could significantly 
affect demand for balancing services) and/or RWE's position in the balancing 
market would be strength ened by the Concentration  (so that RWE would be more 
likely to be called upon to operate in the balancing market). Neither of these 
conditions appl ies to the present case. First, the Concentration  only marginally 
increase s RWE's renewable capacity ( […] TWh , [0-1]%) and , second, E.ON 
Assets do not materially add balancing capacity to RWE’s generation portfolio.48  
                                                 
48  See paragraph 46. 
 
17 (73) In light of paragraphs (67) to (72), the Commission con siders t hat the  concerns 
described above  in relation to renewa ble auctions or mis -forecasting  renewables 
production  are not supported by the specific facts of the case .  
B. Minority shareholding  
(74) As part of the overall Transaction , RWE will acquire a share of […]* % in E.ON.  
This share represents the exchange component of the consideration obtained by 
RWE for the transfer to E.ON of its distribution and retail business, as well as 
some generation assets, as currently operated by Innogy. The Commission 
routinely reviews exchange of fers resulting in the corollary acquisition of 
minority interests, which also entail s carrying out an assessment of the 
competitive interactions between the undertaking in which the minority interest is 
obtained and the retained activities of the holder of  that interest,49 i.e., RWE in the 
present matter. In assessing the competitive effects of any acquisition of control, 
the Commission must also take into account minority interests held by the 
acquirer or target in any related companies .  
(75) Hence, within the framework of  the merger control assessment of the 
Concentration , the Commission has considered whether  the structural link created 
by the acquisition of that minority interest could :  
(a) weaken RWE's and E.ON's incentives to compete in the market for generati on / 
wholesale supply in Germany (horizontal effects);  and/or  
(b) give RWE and/or E.ON the ability and incentive to foreclose competitors either 
(or both) upstream in the generation/wholesale of electricity or downstream in the 
retail supply of electricity  in Germany (vertical effects) . 
The Notifying Party's view  
(76) RWE  submi ts that its minority stake in E.ON is intended to be purely financial in 
nature  and will not give it any ability to exercise decisive influence over E.ON . 
According to the  Investor Relationsh ip Agreement  signed by the Parties,  RWE 
commits to  [act purely as a  financial  investor . RWE and E.ON have contractually 
agreed on a mechanism which limits the exercise of RWE’s vote to no more than 
16.67% in the shareholders’ meeting (irrespective of the turnout) and which 
prevents RWE from undertaking measures that would confer control over E.ON 
or increase RWE’s influence in E.ON above the 16.67% shareholding. ]50  
(77) The Notifying Party also submits that although RWE will have the right to 
nominate one membe r of the Supervisory Board , its representation in the board is 
limited (one out of 14 Supervisory  Board  members, i.e. one out of seven 
shareholders’ representatives) and therefore will not give RWE any ability to 
influence E.ON's  strategic decisions.  
                                                 
* Should read: “16.67”.  
49  See, e.g., Case COMP/M.7276 – GlaxoSmithKline/Novartis Vaccines Business (excl. 
Influenza)/Novartis Consumer Health Business.  
50  This provision is specifically designed by the Parties to prevent RWE from having the ability to block 
any resolutions.  
 
18 (78) Overa ll, the Notifying Party  concludes  that RWE's minority share in E.ON would 
result in neither horizontal nor vertical effects, mainly because (i)  RWE has no 
ability to influence E.ON's commercial conduct ; (ii) absent this ability, E.ON ’s 
strategy is unlikely  to change as the minority stake does not alter it s incentives ; 
and (iii) RWE's incentives are not materially affected given the limited size of the 
share that it would hold in E.ON.  
The Commission's assessment  
Horizontal effects  
(79) E.ON would retain some production  assets in Germany post-merger  and RWE's 
and E.ON's activities would  therefore  overlap  in the market for generation and 
wholesale supply of electricity . The minority stake may in theory lessen RWE's 
incentives to compete as RWE would not only dir ectly benefit from a price 
increase but also indirectly through its  stake (and therefore the profits) in E.ON.  
(80) The Commission notes, however, that E.ON's gen eration  would be very limited 
([…] TWh, representing [0-5]% of the German gene ration in 2017 ) and  E.ON ’s 
generation capacity  would be  mostly made of nuclear assets , which will have to 
be decommissioned by 2022 .51 Once the nuclear plants are phase d out, E.ON ’s 
generation would represent approximately  [0-5]% of German production.  
(81) As argued above, the Commission considers it unlikely that the Concentration  
would materially strengthen RWE's ability and incentives to withhold capacity. In 
the Commission's view, t he minority stake in E.ON would not alter this 
conclusion. The share in E .ON is  unlikely to  increase RWE's ability to withhold 
capacity as RWE would not  have any significant influence on the day -to-day 
operation of E.ON ’s generation assets  given the size of RWE's stake and the 
provisions set out in the Investor Relationship Agr eement  (see paragraph (76)). 
Nor is it likely that […]* would have increased  incentives to withhold its own 
assets as any additional profits that it would receive  via it s minority share in 
E.ON would be small due to E.ON ’s limited generation capacity and the fact that 
RWE would participate in only 16.67% of E.ON’s  profits.  
Vertical effects  
(82) The Commission has considered whether RWE's acquisition of the minority stake 
in E.ON can give rise to any input or customer foreclosure.  
(83) Input foreclosure arises if the merged entity  has the ability and incentive to 
foreclose competitors' access to an important input  with the aim of lessenin g the 
competition that it faces in the downstream market.  
(84) As discussed in the previous section , the acquisition of E.ON Assets would  not 
significantly increase RWE's position upstream  (whether overall,  based on all 
generation or separately for either rene wable or conventional generation)  nor 
would it materially strengthen  RWE's ability  and incentive to increase prices in 
                                                 
51  In fact two of the nuclear plants retained by E.ON, Grohnde and Brokdorf, need to be 
decommissioned already by end of 2021 and the third one, Isar 2, by end of 2022.  
* Should read: “RWE”.  
 
19 the wholesale market (through, e.g., capacity withholding strategies) to the 
detriment of downstream competitors.  
(85) The incentives to forec lose downstream competitors  critically depend  on how 
much additional profits the vertically integrated company expects to gain 
downstream once the competitors are foreclosed/marginali sed. This in turn 
depends on the company's position downstream and on its  ability to attract 
customers switching away from the foreclosed competitors. In the Commission's 
view,  RWE's position downstream post-merger will be weaker overall than pre -
merger. Pre -merger RWE served approximately […]% of the German electricity 
demand.  Post-merger RWE will not be directly active down stream, and while it 
would  have a stake in a la rger downstream company  (post -merger E.ON  would 
serve approximately [10-20]% of the demand )52, RWE would only benefit from 
an increase in E.ON ’s downstream sales  in proportion to its limited share in E.ON 
(16.67%).53 The Concentration therefore is unlikely to lead to input foreclosure.  
(86) Customer foreclosure may occur when the merged entity may foreclose access to 
a sufficient customer base to its actual or potential  rivals in the upstream market 
and reduce their ability or incentive to compete.  
(87) It should be first noted that E.ON would not immediately benefit from customer 
foreclosure as this strategy would be, at least initially, meant to weaken 
competition upstream  and, as a result, increase RWE's profits in the wholesale 
market. Therefore, absent  RWE's control or influence, E.ON would not 
necessarily have incentives to accommodate RWE's attempt to foreclose 
competitors upstream.   
(88) Even assuming that RWE would be in  a position to materially influence E .ON's 
strategy, E .ON’s downstream position  does not appear sufficiently strong for 
customer foreclosure to be of concern. While E.ON would be the largest 
electricity retail supplier post -Concentration , its share of the total demand of 
electricity in Germany would be  [10-20]%. Even if E.ON were to source its entire  
electricity requirement from RWE, upstream competitors would still have more 
than [80-90]% of the demand to serve.  
(89) Some of the respondents to the Commission's  questionnaire  voiced concerns  that 
if RWE and E.ON were to trade internally to a significant  extent, this may have 
negative repercussions on the liquidity of the electricity wholesale market.  
(90) Currently , RWE and E.ON trade internally  to a limited extent. RWE submitted 
that there is no general netting of RWE’s generation and retail position54 because 
                                                 
52  In theory, input foreclosure may be targeted to some specific segme nts of the retail supply of 
electricity where the integrated company has a larger share. However, given the functioning of the 
wholesale market (with power exchanges where retailers can source electricity at the same conditions 
as any other retailers), it is unlikely that any vertically integrated company can practically 
discriminate against one specific (or a sub -group of) downstream competitor. This reduces the 
incentives to increase the price of the upstream input (wholesale electricity). See Guidelines  on  the  
assessment  of  non -horizontal  mergers  under  the  Council  Regulation  on  the control of 
concentrations between undertakings, paragraph 43.  
53  Roughly speaking, RWE's position downstream post -merger can be approximated by a share of [0-
5]% (= [10-20]% * 16.67%).  
54  […]. 
 
20 typically retail and generation portfolios have different hedging requirements and 
are therefore subject to different hedging strategies.55 RWE sells approximate ly 
[20-30]% of its electricity generation internally, and E.ON procures 
approximately [10-20]% of its retail volumes  internally .  
(91) The limited extent of internal trades suggests that there may not be significant 
advantages by systematically trading internal ly. Any change in RWE's and 
E.ON's trading strategy post -merger could then only be justified on the 
expectation that the possible lower liquidity in the market can deteriorate 
competitors' ability to hedge their position  (and therefore compete effectively)  in 
the wholesale market. Whilst RWE and E.ON would be the largest supplier, 
respectively, upstream and downstream in Germany post -merger, the vast 
majority of the electricity generation (approx. [80-90]%) and the wholesale 
demand (approx. [80-90]%) would be accounted for by suppliers other than RWE 
and E.ON.  Therefore, the Commission considers it unlikely that the 
internalisation of RWE and E.ON trading would significantly affect liquidity on 
the German electricity wholesale market and lead  to some form of  competitor 
foreclosure.56  
(92)  One final concern raise d  by some  respondent s to the Commission's market 
investigation relates to the risk of RWE having access to information on E.ON's 
strategies/activities downstream and using it to gain a competitive advanta ge vis -
à-vis vertically non -integrated (or relatively less integrated than E.ON and RWE) 
companies. For example,  some respondents  indicated that,  as a result of its share 
in E.ON , RWE could have access to information on E.ON's procurement strategy 
and this may enable RWE to offer products which are best suited to E.ON ’s 
needs. RWE could also have access to E.ON's energy demand projections which 
can be more accurate than other retai lers (as E.ON serves a relatively larger share 
of the demand) and this may give an advantage to RWE when setting out its long -
term investment strategy for new generation capacity.  
(93) According to the Notifying Party, there is no risk that  information confide ntial to 
E.ON would be accessible to RWE as a result of RWE acquiring the minority 
interest. This is because RWE representatives appointed to the E.ON Supervisory 
Board will be  subject to confidentiality obligations under German Corporate law.  
Information provided to an RWE representative as a member of E.ON’s 
Supervisory  Board  can only be used by such member for said role and cannot be 
made available to other parts of the RWE group for other purposes. A breach of 
such duty of confidentiality would be a vio lation of fiduciary duties  and could 
also result in criminal liability of the RWE representative .57 The Notifying Party 
points to a recent decision by the FCO ( EnBW / MVV )58 which concluded that 
the right to nominate a member of the supervisory  board does no t improve the 
                                                 
55  RWE submitted that " […]" 
56  In addition, any trade or contract between RWE and E.ON post -merger would  no longer be intra -
group (Art. 2 (5) and (6) REMIT Implementing R egulation) and it would therefore no t benefit from 
the ex emption to automatic reporting to the competent supervisory authorities under Art. 4 (1) a) of 
the same regulation . Therefore, if RWE were to treat significantly more favourably E.ON than other 
retailers (to prevent E.ON from procuring electricity from ups tream competitors) this may attract the 
attention and trigger the intervention of the competent supervisory authority.  
57  Section 404 of the German Stock Corporation Act, section 53 SE -Implementation Act, articles 9, 49 
SE-Regulation . 
58  See FCO , 13.12.201 7, B4 -80/17 . 
 
21 level of information or strengthen the influence of the  nominating shareholder in 
the company.  
(94) Irrespective of whether or not confidentiality obligations under German Corporate 
law are sufficient to prevent exchange of sensitive information, the Commission 
considers that the impact of the Concentration  is likely to be limited. In particular, 
the sensitive  information to which  RWE might  have access post-merger through 
its minority interest in E.ON would be very similar in nature to the type(s) of 
information  it already has access  to in the pre -merger situation as the holder of a 
77% controlling interest in Innogy represented in Innogy’s Supervisory Board . 
On the basis of the outcome of the market investigation , it is unclear whether, and 
if so, to what extent , any additional information resulting from E.ON's larger 
position downstream post-merger, compared to Innogy’s pre -merger position,  
could give a  material  competitive advantage to RWE.  For example,  it is at least 
dubious that the accuracy of E.ON's energy demand projections would materially 
improve post -merger considering that, even if larger, E.ON would still serve a 
minority of the German demand ( [10-20]%).  
(95) In light of the above, the Commission is of the view that the minority interest  that 
RWE would hold in E.ON post -merger is unlikely to give rise to any vertical 
foreclosure effects.  
C. Vertical link with Amprion  
(96) RWE jointly (together with Commerz Real AG ) controls Amprion , one of the 
four German electricity TSOs.59 RWE's transmission activiti es are vertically 
linked to its generation and wholesale supply business. While the link is pre -
existent  and transmission activities are subject to regulation , theoretically, were 
the Concentration  to strengthen  RWE's position in the generation and wholesale 
supply of electricity, this might increase its incentives to foreclose access to 
Amprion's transmission grid.   
(97) However,  for the reasons set out below,  the Commission considers it unlikely that 
vertical forecl osure effects would  arise as a result of the Concentration .  
(98) First, RWE's control over Amprion is shared with Commerz Real AG. Any 
foreclosure strategy would require the support of Commerz Real AG which may 
have little, if anything, to gain from marginalis ing RWE’s upstream  competitors  
as, unlike RWE, it is not active in the upstream  market.  
(99) Second , the incentive to foreclose upstream  rivals depends on the extent to which 
the downstream division of the integrated company can be expected to benefit 
from hig her prices downstream once the upstream  rivals have been foreclosed. 
Typically the greater the market share of the merged entity downstream, the 
greater the base of sales on which to enjoy increased margins. The market for the 
wholesale supply of electrici ty is downstream to the market for electricity 
transmission60 and, a s discussed in section 5.1.5 , the Concentration  enhance s 
RWE's position in the downstream market only marginally  (regardless of whether 
                                                 
59  See COMP/M.6225 - MOLARIS/ COMMERZ REAL/ RWE/AMPRION . 
60  In the sense that access to the transmission network is a necessary input to supply electricity at 
wholesale level.  
 
22 the market is considered as comprising all generation  or segmented between 
conventional and renewables generation falling under the EEG ) and only 
temporarily . 
(100)  Finally, TSOs are regulated under national law and EU regulation and subject to  
the obligation to grant non -discriminatory access to the grid to any s upplier.61 
This woul d further  reduce the scope of any foreclosure strategy.   
6. CONCLUSION  
(101)  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 Regulation and Article 57 of the EEA Agreement . 
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Member of the Commission  
 
                                                 
61  See Form CO para 153.