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,  5.7.2018  
C(2018)  4414 fin al 
  
 
 
To the notifying parties  
Subject : Case M.8855 - Otary / Eneco / Electrabel / JV  
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 1 June 2018 , the European Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by which Otary RS 
NV ("Otary", Belgium), Eneco Wind Belgium NV ("Eneco", part of the Eneco 
Group NV, The  Netherlands) and Electrabel NV ("Electrabel" part of the ENGIE 
group, France) intend to acquire within the meaning of Articles 3(1)(b) and 3(4) 
of the Merger Regulation joint control of SeaMade NV ("SeaMade", Belgium).3 
Otary, Eneco, and Electrabel  are collectively referred to hereinafter as the 
"Parties" and the concentration as the "Proposed Transaction".  
1. THE PARTIES  
(2) Otary focuses on the development, construction and operation of three Belgian 
offshore windfarm projects (Rentel, Seastar and Mermai d), with a combined total 
capacity of approximately 800 MW. It is jointly owned and controlled by the 
following 8 companies: Dredging Environmental & Marine Engineering NV 
                                                 
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   SeaMade is the most likely name of the joint venture, but the final name may be different.  
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omitted has been replaced by ranges of figures or a 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.  PUBLIC VERSION  
2 (DEME), Green Offshore NV, Elicio NV, S.R.I.W. Environnement SA, Z -Kracht 
NV, Aspita vi Offshore II NV, Socofe SA, and Power@Sea NV.  
(3) Eneco manages onshore and offshore windfarm projects in Belgium. It is part of 
the Eneco Group active in the production of electricity and supply of electricity 
and gas to private and business customers in va rious countries in the EU.  
(4) Electrabel is engaged in the generation of electricity and heat, and the supply of 
electricity and natural gas to customers in Belgium, the Netherlands and 
Luxembourg. It is part of the Engie group ("Engie", France), a global en ergy 
player.  
(5) SeaMade (the "Proposed JV") is a joint venture set up for the purpose of 
developing, constructing and operating the two Belgian offshore windfarm 
projects Mermaid (235,2 MW) and Seastar (252 MW).  
2. THE OPERATION  
(6) Pursuant to a Term Sheet entered into on 20 February 2018 (the "Term Sheet"), 
the offshore wind farm projects Mermaid and Seastar (under development), 
located in the Belgian North Sea, will be merged into the existing Seastar NV 
("Seastar"). Seastar is currently owned and solely controlle d by Otary (51%), 
whereas the eight Otary shareholders each hold a non -controlling minority 
interest of 6,125%. Mermaid THV ("Mermaid") is currently a contractual non -full 
function joint -venture between Otary (65%) and Electrabel (35%) holding the 
domain c oncession for the development, construction and operation of the 
Mermaid wind project.   
(7) Once the merger between Mermaid and Seastar is completed, Eneco will purchase 
12,5% of the shares in Seastar through a share and purchase agreement with 
Otary. As a re sult of the Proposed Transaction, Otary will indirectly hold 70% of 
the voting rights in the Proposed JV,4  Eneco 12.5% and Electrabel 17.5%.  
(8) SeaMade's Board of Directors will consist of 11 directors: 8 Otary 
representatives, 2 Electrabel representatives and 1 Eneco representative. Strategic 
decisions, including the approval of the business plan and the annual budget, will 
be approved by the majority of the directors but will always require a positive 
vote of all Otary directors as well as the positive vot e of 1 Electrabel director and 
the Eneco director. Therefore, Otary, Eneco, and Electrabel will jointly control 
SeaMade.  
3. THE CONCENTRATION  
(9) The Parties submit that the Proposed JV is full -function because: (i) it will own, 
operate and maintain the two offsh ore windfarm projects, will finance 
construction through project finance and will have its own management and staff 
dedicated to day -to-day operation; (ii) it will act as an independent generator and 
wholesale supplier of electricity on the market; (iii) t he electricity generated by 
                                                 
4  Otary will indirectly hold its shares in SeaMade through an intermediate hold ing company, Otary 
Bis NV, in which Otary will hold a controlling stake of 51% and the individual Otary shareholders 
will each hold a 6.125% non -controlling stake.  
3 the two offshore windfarms will be tendered and awarded at market -compliant 
terms; and (iv) the Belgian State has granted a 20 -year renewable concession for 
the exploitation of the Mermaid and Seastar windfarms.  
(10) On the basis of the information provided in the Form CO and available in the 
Term Sheet,5 the Commission finds that the Proposed JV will have sufficient 
resources to operate independently on the market and notes, in addition, that the 
Proposed JV may recruit its own perso nnel and that, in any event, seconded 
personnel will be fully dedicated and act under the authority of the JV 
management for the development of the offshore windfarm projects in question.  
(11) The Commission also finds that the Proposed JV is intended to opera te on a 
lasting basis in view of the duration of the already granted concessions, the fact 
that the Proposed JV will operate the two windfarms after their development and 
that the Term Sheet has been entered without limitations in time.  
(12) In addition, since the Proposed JV will develop and operate new electricity 
production capacities, it will not take over a specific function within the parent 
companies' business activities. To the contrary, the Proposed JV will directly 
tender under marke t conditions the electricity generated by its windfarms and thus 
have its own access to the market.  
(13) Furthermore, while the Parties are also active in the generation and supply of 
electricity, the Commission observes that the Proposed JV will tender to the  
market the entire electricity production of its two windfarms and award it in the 
form of [Information on the structure that SeaMade will apply in bringing its 
electricity generation capacity to the market as well as the size of the blocks of 
electricity] , by means of [Information on the duration of the PPAs concluded by 
SeaMade]  Power Purchase Agreements ("PPAs"). Thus, the Proposed JV will not 
have any dependency on sales to its parents, as all its sales will be done through 
competitive tenders and, ther efore, no production has been committed from the 
outset to the benefit of the Parties.  
(14) Pursuant to section 7 of the Term Sheet, the Parties are entitled to matching rights 
[Structure and overall size of matching rights offered to the Parties to the 
Transac tion with regard to SeaMade's electricity generation capacity] . However, 
if matching rights are exercised, it will be at market price calculated by reference 
to the most competitive bids submitted to reach 100% cumulative output.6 
Moreover, […] approximate ly […]% of production will in any event be awarded 
to the most competitive bidder, i.e., is not subject to any matching rights.7 As a 
result, whatever the production acquired by the Parties from the Proposed JV, it 
will always be valued at normal commercia l conditions. Hence, the Commission 
                                                 
5  Form CO, section 3.6.  
6  Form CO, paras. 135 -148; Reply of the Parties to the request fo r information of 18 June 2018.  
7  Contrary to the submission of a respondent to the market investigation, the Proposed JV can be 
considered to deal with its parents at arm's length commercial terms even though the most 
competitive bid may possibly be submi tted by one of the Parties (Reply of a third -party to the 
request for information of 4 June 2018, and follow -up correspondence of 14 June 2018).  
4 concludes that the relationship between the joint venture and its parents will be 
truly commercial in character.8        
(15) In view of the above, the Commission finds that the Proposed JV will perform on 
a lasting basis all  the functions of an autonomous economic entity and will 
therefore be economically autonomous from an operational viewpoint. Hence, the 
Proposed JV constitutes a concentration within the meaning of Article 3(1)b and  
Article 3(4) of the Merger Regulation.  
4. EU DIMENSION  
(16) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 5 000 million9 [EUR 74 286 million]. Each of them has an EU -
wide turnover in excess of EUR 250 million [Otary (and its shareholders) EUR 
[Otary's (and it s shareholders') EU -wide turnover] , Eneco (Eneco Group) EUR 
[Eneco Group's EU -wide turnover] , Electrabel (Engie) EUR [Electrabel's 
(Engie's) EU -wide turnover] ], 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 an EU dimension.  
5. COMPETITIVE ASSESSMEN T 
(17) The Proposed JV will own, develop, construct and operate two offshore 
windfarms in the North Sea, based on a 20 -year renewable concession awarded 
by the Be lgian State in 2012 following a competitive process. The Proposed JV 
will therefore engage in the generation and wholesale supply of electricity once it 
becomes (partly) operational in the third quarter of 2020. In contrast, the 
Proposed JV will not – [Strategic information regarding SeaMade's activities in 
the space of the development, construction and operation of wind farms] .     
5.1. Market Definition  
(18) The Proposed JV will be active in the generation and wholesale supply of 
electricity where the Parties are a lso active, thus giving rise to a horizontal 
overlap. The Parties are also active directly or indirectly in the retail supply of 
electricity in Belgium, which gives rise to a vertical link with the Proposed JV.10  
                                                 
8  The Commission also notes that the Belgian energy regulator ("CREG") has the statutory 
obligation to review  the market conformity of the PPA prices and to approve the concluded PPAs, 
as well as the right to order the adjustment of the correction factor applicable to the LCOE 
(Levelized Cost of Electricity) used for the calculation of the minimum price per MWh o f 
produced electricity guaranteed under the applicable renewable energy certificate (REC) scheme 
(see Article 14, §1ter, 1° of the Royal Decree of 16 July 2002 aimed to establish mechanisms 
designed to promote the production of electricity from renewable s ources). Form CO, paras. 124 -
125 and reply of the CREG to the request for information of 19 June 2018.  
9  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).  
10  The Parties contend that the vertical link in question is only potential in view of the fact that the 
electricity retailers (including Electrabel and Eneco) will not acquire electricity directly from the 
Proposed JV but rather from its off -takers  (Form CO, para. 162). However, the Parties also 
indicate that if they were to acquire electricity under PPAs from the Proposed JV (and thus 
5 5.1.1.  Generation and wholesale supply of electric ity 
5.1.1.1.  Product market definition  
(19) The Parties submit that the generation and wholesale supply of electricity 
constitutes one single relevant product market that: (i) has not and should not be 
segmented on the basis of the source of electricity generation (e.g. , renewable 
sources); but (ii) should encompass electricity imports and physical and financial 
trading on organised markets (e.g., Belpex) and OTC.11   
(20) The Commission has consistently defined a relevant product market 
encompassing both the generation and wh olesale supply of electricity, 
irrespective of the generation sources and trading channels.12 The Commission 
has also considered in the past whether  the financial trading of electricity 
belonged to the same product market as the generation and wholesale sup ply of 
electricity, or to distinct markets.13 Generally, financial trading has been 
distinguished from wholesale supply due to differences in settlement, duration 
and overall function since financially settled contracts are about trading risk while 
physical ly traded ones are about trading electricity for consumption.14 However, 
in EDG/Segebel , the Commission concluded in relation to Belgium that the 
relevant market comprised electricity generation, imports and trading on 
organised markets or OTC for both physically and financially settled products.15  
(21) In the present case, the distinction between physically and financially settled 
trades can be left open since the Proposed Transaction is unlikely to raise serious 
doubts on a narrow definition  limited to phys ically traded electricity. Regarding a 
possible segmentation according to the source of electricity, the question arises 
whether a dynamic assessment ought not to take into account Belgium's 
commitment to exit nuclear electricity production. However, that commitment 
will in any event not materialise before 2025 and implementing measures still 
need to be adopted and may then be adjusted to ensure security of supply or 
reflect energy cost developments.16 Moreover, nuclear plants still account for 
56% of total electricity production in Belgium.17 Hence, a segmentation 
according to generation source, and in particular excluding nuclear, does not 
appear to be a plausible option in the present context.    
                                                                                                                                                 
actually become off -takers themselves) [Strategic information regarding the Parties' (future) 
activities in the seg ments of the wholesale and retail supply of electricity] (Form CO, para. 151).  
11  Form CO, paras. 177 -179. 
12  See cases COMP/M.7927 – EPH/ENEL/SE , paras. 9-12; COMP/M.6984 – EPH/Stredoslovenska 
Energetika , para. 15; M.3268 – Sydkraft/Graninge , paras. 19 -20; COMP/M.8660 – 
Fortum/Uniper , paras. 18 -21. 
13  See cases COMP/M.5549 – EDF/Segebel , paras. 79-83; COMP/M.3868 – DONG/Elsam/Energi 
E2, paras. 241 -246; COMP/M.8660 – Fortum/Uniper , para. 19 -21. 
14  See case e.g. COMP/M.3868 – DONG/Elsam/Energi E2 , para. 252; COMP/M.8660 – 
Fortum/Uniper, paras. 43-48. 
15  Case COMP/M.5549 – EDF/Segebel , para. 21.  
16  Belgium Federal Energy Strategy, 30 March 2018:   
http://www .presscenter.org/files/ipc/media/source6892/Federale_energiestrategie.pdf .  
17  CREG Annual Report 2017, p. 47.  
6 (22) Overall, the precise market definition can be left  open since  no serious doubts 
arise as to the compatibility  of the Proposed Transaction with the internal market, 
even on the narrowest plausible segmentation, which in the context of this case is 
the generation and wholesale physical supply of electricity irrespecti ve of the 
source.  
5.1.1.2.  Geographic market definition  
(23) The Parties acknowledge that the market for the generation and wholesale supply 
of electricity has historically been considered national in scope but submit that, in 
the present case, it should include the Benelux, France and Germany due to: (i) 
coupling of day -ahead and intraday markets; (ii) forward markets' price 
convergence; and (iii) increasing interconnection capacity.18 In any event, the 
Parties consider that no competitive concerns would arise if one were to consider 
only a hypothetical Belgian market, and provided data accordingly.19  
(24) The Commission has indeed historically defined the market for the generation and 
wholesale supply of electricity at national level.20 However, the Commission has 
also recognised  the relevance of interconnection capacity between Member States 
and of pricing relationships across interconnection points. In the present case, the 
Parties have not submitted evidence supporting their claim that the market should 
be considered wide r than Belgium, except for some high -level references to new 
interconnection projects.  
(25) In any event, the precise geographic market definition may be left open in the 
present case since  no serious doubts arise as to the compatibility of the Proposed 
Transa ction with the internal market even on the narrowest plausible 
segmentation , which is Belgium.  
5.1.2.  Retail supply of electricity  
5.1.2.1.  Product market definition  
(26) The Parties submit that the definition of the market for the retail supply of 
electricity and its possibl e segmentation can be left open since no competition 
concerns arise irrespective of how the market is defined.21  
(27) The Commission has previously considered that the retail supply of electricity 
constitutes a separate product market from the generation and wh olesale supply of 
electricity, and that potential narrower segments can be distinguished based on 
factors such as different needs and profiles on the demand side and different 
services and technologies on the supply side. In this regard, separate product 
markets have been defined for the retail supply of electricity to: (i) large industrial 
                                                 
18  Form CO, para. 182.  
19  Form CO, para. 183.  
20  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.  
21  Form CO, para. 203.  
7 and commercial customers; (ii) small industrial and commercial customers; and  
(iii) household customers.22 
(28) In the present case, the precise product market definition may be left open since 
no serious doubts arise as to the compatibility of the Proposed Transaction with 
the internal market irrespective of the segmentation considered.  
5.1.2.2.  Geographic market definition  
(29) The Parties submit that the definition  of the geographic scope  of the market for 
the retail supply of electricity can be left open since no competition concerns arise 
irrespective of how the market is defined.23  
(30) The Commission has historically defined the retail electricity markets as national 
in scope.24 Under  specif ic conditions , the Commission has also considered 
broader or narrower definitions. In relation to Belgium, the Commission has in 
the past excluded wider than national markets and, while considering the 
possibility of regional markets for household customer s, has consistently assessed 
the retail supply of electricity, irrespective of the relevant segments, at national 
level.25 In the present case, the Commission has not received indication that retail 
markets should be considered at a level narrower than Belg ium as a whole.   
(31) In any event, the precise geographic market definition may be left open since no 
serious doubts arise as to the compatibility of the Proposed  Transaction with the 
internal market irrespective of the geographic market considered.  
5.2. Substanti ve Assessment  
(32) As noted, the Proposed JV gives rise to a horizontal overlap between the 
Proposed JV and the Parties in the generation and wholesale supply of electricity. 
Likewise, a possible vertical link arises between  the Proposed JV's activities in 
the generation and wholesale supply of electricity and the Parties' activities in the 
retail supply of electricity.26 
5.2.1.  Horizontal overlap in the generation and wholesale supply of electricity  
(33) The electricity generated by the Proposed JV will be offered to the ma rket by 
means of PPAs, subject to approval by the Belgian energy regulator (CREG).27 
                                                 
22  See, e.g., in relation to Belgium case COMP/M.5549 – EDF/Segebel , para. 132.  
23  Form CO, para. 202.  
24  See cases COMP/M.6984 – EPH/Stredeoslovenska Energetika , para. 18; COMP/M.5827 – 
Elia/IF M/50 Hertz , para. 24; COMP/ M.5496 – Vattenfall/ Nuon Energy , para. 15; COMP/M.5467 
– RWE/Essent , paras. 283 -284. 
25  Case COMP/M. 4180  – Gaz de France / Suez , paras. 738 -743; Case COMP/M.5549 – 
EDF/Segebel , para. 138.  
26  For the sake of completeness, the Commission notes that [Confidential information with regard to 
the structure and the development of the Seastar and Mermaid offshore wind farms]. Moreover, a 
number of similar projects are underway in Belgium and abroad, a nd will still be awarded in the 
future. Likewise, ENGIE is a supplier of offshore substations linking the windfarm to the 
transmission grid, but is only one potential supplier of that type of equipment to the Proposed JV.  
27  In addition, the CREG has the s tatutory obligation to periodically review the market conformity of 
the PPA price. If this review reveals a difference between the PPA price and an average 
8 The Proposed JV will therefore engage in the generation and wholesale supply of 
electricity in Belgium. In turn, that market is affected because the combined 
market share a t the level of Belgium of the Proposed JV and the Parties is above 
20%, both in terms of capacity and generation, as apparent from Table 1 below.  
TABLE 1.  GENERATION AND WHOLES ALE SUPPLY OF ELECTR ICITY (BELGIUM ) 
 Capacity (%)  Generation (%)  
 2016  2014 -2016  2021  2016  2014 -2016  
Proposed JV  0 0 1.6 0 0 
Otary  [0-5] [0-5] [0-5] [0-5] [0-5] 
Otary shareholders  [0-5] [0-5] [0-5] [0-5] [0-5] 
Eneco  [0-5] [0-5] [0-5] [0-5] [0-5] 
Electrabel  [40-50] [40-50] [30-40] [60-70] [50-60] 
Combined  [40-50] [40-50] [40-50] [60-70] [50-60] 
EDF Luminus  [5-10] [5-10] [5-10] [5-10] [5-10] 
Others (incl. decentralised 
sources)28  [30-40] [30-40] [20-30] [10-20] [10-20] 
Imports  [10-20] [10-20] [20-30] [5-10] [10-20] 
Total  100 100 100 100 100 
Source: Form CO, paras. 214  and 217.  
(34) The Notifying Party submits that the total electricity capacity of the future 
Mermaid and Seastar offshore wind farms (487.2 MW) makes up less than 2% of 
the total Belgian capacity (of approx. 25 000 MW).29 According to the Parties, t he 
capacity s hare of the Proposed JV would even drop to 1.6% based on 2021 
capacity estimates.30  
(35) The Commission observes that the Belgian energy regulator (CREG) relies on 
different market share indicators, which exclude imports and other decentralised 
energy sources. Table 2 reproduces the market share in the generation and 
wholesale supply of electricity in Belgium, as compiled in the 2017 CREG 
Annual Report.31 
  
                                                                                                                                                 
nominated price, the aforementioned correction factor will be adjusted by the CREG (see Form 
CO, par a. 124).  
28  Decentralised energy sources generally refer to generation close to consumption sites that is fed 
into the distribution grid.  
29  Form CO, para. 123. The share is around 2.3% if imports are discounted.  
30  Form CO, para. 214. The share is aroun d 2% if imports are discounted.  
31  CREG Annual Report, p. 40. The Commission notes that production data per power source 
contained in the same annual report (p. 47) do include decentralised sources.    
9  
TABLE 2.  GENERATION AND WHOLES ALE SUPPLY OF ELECTR ICITY (BELGIUM ) 
 Capacity (%)  Generation (%)  
 2015  2016  2017  2015  2016  2017  
Electrabel  71 73 72 67 79 77 
EDF Luminus  12 14 14 12 9 11 
E.ON  4 0 0 8 1 0 
Others  14 14 14 13 11 12 
Total  100 100 100 100 100 100 
Source: CREG Annual Report 2017, p. 40.  
(36) On the basis of the CREG data, thus excluding imports and decentralised 
generation , the total electricity capacity of the future Mermaid and Seastar 
offshore windfarms (487.2 MW) amount to 3.3% of the total Belgian capacity 
(currently of approx. 14 069 MW) .32 In turn, respondents to the market 
investigation have indicated that the capacity of the Proposed JV at Belgian level 
is "significant " as it would operate Belgium's " biggest offshore wind park ".33 
However, irrespective of the different datasets considere d and of the relative 
significance of the Seastar and Mermaid windfarms' production, the Proposed JV 
will bring a limited addition to the Parties' generation portfolio, which is not such 
as to raise serious doubts in respect of the Proposed Transaction's c ompatibility 
with the internal market.   
(37) At the outset, the Parties explain that the concessions for the Seastar and Mermaid 
windfarms were awarded to Otary and Otary and Electrabel, respectively, in 2012 
based on a competitive process.34 The Proposed Trans action does not therefore 
cause an increment in the generation portfolio of either Otary or Electrabel. In 
particular, [Structure and size of matching rights offered to the Parties to the 
Transaction with regard to SeaMade's electricity generation capacity ],35 
[Structure and size of matching rights offered to the Parties to the Transaction 
with regard to SeaMade's electricity generation capacity] .36 With respect to 
Seastar, Otary  and its parents already own the concession and the associated right 
to dispose of the production, while Eneco [Confidential information with regard 
to agreements concluded between Otary and Eneco pre -dating the current 
Transaction]  12.5% interest in the P roposed JV. 37 Hence, the Commission finds 
that the merger -specific increment (if any, in particular for Electrabel) brought 
about by the Proposed Transaction is in reality much more limited than what the 
above market shares suggest. In any event, the exerc ise of matching rights will 
realistically entitle each of the Parties to only a certain percentage of the Proposed 
                                                 
32  CREG Annual Report 2017, pp. 40 and 47.  
33  Replies  of third -parties to the request for information of 4 June 2018 (and follow -up 
correspondence).  
34  Form CO, para. 121. See also reply of the CREG to the request for information of 19 June 2018.  
35  Term Sheet, section 7.1; Form CO, paras. 138 -140 
36  Form CO , paras. 143 -144. 
37  Reply to the requests for information of 29 June 2018 and 2 July 2018.  
10 JV's production, thus limiting the increment that may be allocated to each of 
them.  
(38) Secondly, while the Proposed JV is bound to ensure the ma rket-compliant nature 
of PPAs entered into for the sale of the Seastar and Mermaid windfarms' 
production, subject to CREG oversight,38 the Commission understands that the 
Proposed JV is not as such under an obligation to offer and supply that production 
or a specific percentage thereof, to third -parties. Hence, the Commission 
disagrees with the submission of a respondent to the market investigation to the 
effect that, absent the Proposed Transaction, the Parties in general and Electrabel 
in particular would have had to be treated under the same commercial terms as 
any third -party bidder (or vice -versa) and, notably, would not have benefited from 
the matching rights provided for under the Term Sheet.39 To the contrary, the 
Commission understands that, absent th e Proposed Transaction, [Structure and 
size of priority rights offered to the Parties to the Mermaid THV]  [Confidential 
information with regard to potential business strategies to be deployed by Otary 
within Seastar NV prior to the establishment of the Sea Made JV] , [Confidential 
information with regard to agreements concluded between Otary and Eneco pre -
dating the current Transaction] . In turn, under the Proposed JV marketing 
arrangement, Electrabel will not have access, […], to a greater amount of 
electric ity offtake compared to the situation prevailing in the absence of the 
Proposed Transaction.  
(39) Against this background, the Parties submit that the Proposed JV aims to create 
synergies and lower the costs of the completion of the Mermaid and Seastar 
windfar m development, and of their subsequent operation, in view of the 
reduction in the guaranteed production support price under the renewable energy 
certificate scheme recently modified by the Belgian government.40 As a result, 
according to the Parties, the Pro posed JV will enable new capacity to be brought 
to the market, which is inherently pro -competitive.41 Moreover, under the 
modified Belgian renewable energy certificate scheme, the Parties are bound to 
maximize the technical availability of the wind turbines  during the period of 
support, so that they would have no ability and incentive to limit the amount of 
the Proposed JV's production.42      
(40) The market investigation confirmed the Parties' views. In particular, respondents 
indicated that, inasmuch as it woul d add capacity on the market, the Proposed 
JV's " likely impact is that wholesale market prices will on average decrease as 
                                                 
38  See footnote 7 above.  
39  Reply of a third -party to the request for information of 4 June 2018, and follow -up 
correspondence.  
40  Form CO, paras. 28 and 119. Th e scheme was modified by a Royal Decree of 9 February 2017 
with a view to ensuring compliance with the Commission Guidelines on State aid for 
environmental protection and energy 2014 -2020 (see CREG 2017 Annual Report, p. 11).  
41  Form CO, paras. 120.  
42  Form CO, paras. 129-130. The Commission has been able to verify that this obligation is part of 
the LCOE Agreement entered into on 27 October 2017 between the Parties and the Belgian 
Minister for Energy and the North Sea (see Annex 4 to the Term Sheet). More over, the 
Commission notes that the production of the Proposed JV will in any event be marketed by means 
of [Information on the duration of the PPAs concluded by SeaMade]  PPAs, thus leaving it limited 
scope, if any, to vary the production level of the Seas tar and/or Mermaid windfarms.   
11 more production with low marginal costs enters the market " and thus that it can 
be expected to have a " depressing effect on the whole sale market ", "improve 
liquidity in the Belgium market " and " help the market to become more 
competitive ".43 One respondent did " not expect this transaction to have an 
important impact on the competitive market dynamics for the supply for 
electricity as its impact in terms of volume are relatively low and not constant ".44 
Such a view also echoes the Parties' contention that the total electricity capacity 
of the Mermaid and Seastar windfarms remains limited so that, notwithstanding 
its importance in enabling Be lgium to reach renewable energy targets, the overall 
impact of the Proposed JV will be limited.45  
(41) In contrast, one respondent argued that the concentration would lead to a 
wholesale price increase based on the assumption that the production of the 
Proposed  JV would be channelled to former incumbent Electrabel, thus remaining 
"captive", and that the addition of wind production would generally increase price 
volatility and specifically prices on the intra -day and balancing markets, while 
also raising risk pre miums included in the physical day -ahead and financial 
trading prices.46 The first assumption is inaccurate since the entire production of 
the Seastar and Mermaid windfarms will be tendered out; the envisioned 
[Information on the duration of the PPAs conclu ded by SeaMade]  PPAs will be 
entered into at market terms (under CREG's supervision) and Electrabel's 
matching rights are [Structure and size of matching rights offered to the Parties to 
the Transaction with regard to SeaMade's electricity generation capac ity]. 
Moreover, the possible consequences associated with an increase in the share of 
renewable energy sources in the production mix in Belgium are not specific to the 
Proposed JV and any possible specific effects were, in any event, not quantified 
by the respondent in question.47 Conversely, in a subsequent submission, the 
respondent indicated that the addition of a capacity comparable to that of the 
Seastar and Mermaid windfarms could have a significant depressing effect on 
wholesale prices.48 
(42) The Parties a lso submit that  other wind park projects are currently under 
construction (Rentel – 309 MW and Norther – 370 MW) or under development 
(Northwester II – 224 MW) in Belgium, which will bring additional volumes to 
the market while equally reducing any increme nt in their generation portfolio by 
the time the Proposed JV starts production.49 Moreover, the Parties indicate that 
the Belgian government recently decided to award concessions for the 
construction and operation of additional offshore wind farms by means of 
competitive tendering processes, which will further dilute the significance of the 
                                                 
43  Replies to question 3 of the request for information of 4 June 2018.  
44  Reply to question 3 of the request for information of 4 June 2018.  
45  Form CO, para. 123.  
46  Reply to question 3 of the request for information of 4  June 2018.  
47  The Commission notes that other respondents also alluded to the challenges associated with the 
increase in renewable – in particular wind – production, including in relation to price volatility, 
balancing costs and grid investments. These challenges are we ll-known to the industry and all 
stakeholders as being part of the energy transition process.    
48  Reply to the request for information of 4 June 2018 and following correspondence of 14 June 
2018.  
49  Form CO, para. 123.  
12 Proposed JV while creating additional opportunities for third -parties.50 The 
Commission observes that these new opportunities were recently announced as 
part of Belgium's Energy Strategy and that respondents to the market 
investigation have indicated their interest to compete for new offshore wind 
concessions in the future.51                 
* 
(43) In view of the above, the Commission concludes that the Proposed Transaction 
does not give rise to serious doubts as to its compatibility with the internal market 
in respect of the generation and wholesale supply of electricity.     
5.2.2.  Vertical relation between the generation and wholesale supply of electricity and 
the retail supply of ele ctricity  
(44) The Proposed Transaction will also give rise to an affected vertical relation due to 
the Electrabel's  share of the retail supply of electricity in Belgium, as apparent 
from Table 3.  
TABLE 3.  RETAIL SUPPLY OF ELEC TRICITY – BELGIUM  
 2016 (%)  2014 -2016 (%)  
Aspiravi (Otary shareholder)  [0-5] [0-5] 
Electrabel  [40-50] [50-60] 
Eneco (+ENI since 2017)  [5-10] [5-10] 
Parties combined  [50-60] [50-60] 
EDF Luminus  [10-20] [10-20] 
Lampiris (Total)  [0-5] [0-5] 
Other  [20-30] [20-30] 
Total  100 100 
Source: Form CO, para. 256.  
(45) According to the Parties, no competition concern may arise from the "theoretical 
vertical link" between the Proposed JV and the Parties' retail activities, chiefly 
that of Electrabel, because the Proposed Transaction does not re sult in an 
increment of Electrabel's share on the wholesale market compared to the 
counterfactual scenario and, in any event, may have only a very remote impact (if 
any) on Electrabel's position on the retail market.52  
(46) Upon review of all available data and  evidence, the Commission concurs with the 
Parties that the risk of foreclosure arising from the Proposed JV appears 
immaterial due to: (i) the pre -existing character of the vertical links between 
Seastar, Otary and Eneco, on the one hand, and Mermaid, Ota ry and Electrabel, 
on the other hand; (ii) the modest scale of the production of the Seastar and 
Mermaid windfarms, compared to the total amount of electricity supplied at retail 
                                                 
50  Idem.  
51  Respectively: (i) Belg ium Federal Energy Strategy, 30 March 2018; and (ii) Replies to question 1 
of the request for information of 4 June 2018.  
52  Form CO, paras. 257 -258. 
13 level in Belgium (approx. 2.5%); (iii) the fact that the Parties will each 
realistically  capture only a part of the total production of the Proposed JV; and 
(iv) the fact that third -party retailers will be invited to compete for the Proposed 
JV's production, and that approximately […]% of it will in any event be awarded 
to the most  competitive bidder.  
* 
(47) In view of the above, the Commission concludes that the Proposed Transaction 
does not give rise to serious doubts as to its compatibility with the internal market 
in respect of the retail supply of electricity.     
5.2.3.  State aid aspects  
(48) In its assessment, the Commission took into account the grant of State aid to the 
Seastar and Mermaid projects,53 notably the grant of renewable energy certificates 
(REC) entitling the Proposed JV to benefit from a guaranteed production support 
price. In that connection, the Belgian REC scheme was approved by the 
Commission by decision dated 8 December 2016 in case S A.45867, according to 
which Belgium will notify the aid to be granted to the Seastar and Mermaid 
projects.54. Generally, though, the Commission considers that the benefit of the 
support scheme in question and the potential State aid aspects thereof are not 
inherent to the Proposed Transaction but rather attached to the production of 
electricity by each of the Seastar and Mermaid (and other) windfarms. In any 
event, the potential aid would not alter the outcome of the merger control 
assessment of the Proposed  Transaction, as set forth under sections 5.2.1 and 
5.2.2 above.  
6. CONCLUSION  
(49) 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 Agreement on the European Economic Area. This decision is adopted in 
application of Article 6(1)(b) of the Merger Regulation and Article 57 of the 
Agreement on the European Economic Area.  
For the Commission  
(Signed ) 
Margrethe VESTAGER  
Member of the Commission  
 
 
 
 
                                                 
53  Case T -156/98, RJB Mining plc v Commission  [2001] ECR II -337, para. 114.  
54  Decision of the Commissio n in Case SA.45867 (2016/N) – Belgium , para. 25.