The Croatian Competition Agency (CCA) cleared the acquisition of the majority share capital by RWE Hrvatska in the undertakings Koprivnica Plin and Koprivnica Opskrba.
The concentration will have effects in the natural gas distribution market in the territory of Koprivnica-Križevci County where Koprivnica Plin (Koprivnica Gas) is a concession holder for gas distribution, and in the natural gas supply market in the territory of the Republic of Croatia.
By the implementation of the concentration concerned RWE Hrvatska enters the natural gas distribution market in Koprivnica-Križevci County. Given the fact that the natural gas distribution is a fully regulated activity and it is not possible to provide it without a concession that covers a precisely defined area of the local administration unit concerned, the implementation of this merger will not change the structure of the relevant market.
The taking over of the market share that Koprivnica Opskrba (Koprivnica Supply) holds in the natural gas supply market in the whole territory of the Republic of Croatia will strengthen the total market share of RWE Hrvatska in the gas supply market at the national level that will amount to up to 5%. The leaders in this market are Prvo Plinarsko Društvo holding a market share of 20% to 30% and Ina holding 15% to 20% of the relevant market.
On the other hand, the vertical integration within the RWE Group will enable Koprivnica Opskrba to purchase gas from foreign gas suppliers and, given its strengthened bargaining power, also from the Croatian sources of supply where it would result in lowering of the cost of transport. Namely, in spite of the fact that transport cost per unit is regulated in the gas supply market, the implementation of the concentration will lower the transport cost per unit.
In the further liberalisation of the gas market and potential agglomeration in the gas supply market in Croatia, based on the acquired concession areas for distribution and on the deployment of a new distribution network, RWE Hrvatska sees its opportunity for spreading its business and its presence in the market. In this way the natural gas will be more available to the final consumers at lower prices.
The CCA has not received any replies to the published Request for Information and it cleared the concentration in the first phase.