The Supreme Administrative Court (SAC) declared illegal the ban imposed by the Commission for Protection of Competition (CPC) on Ginka Varbakova’s Inercom company to buy the Bulgarian assets of the Czech energy company CEZ in 2018. The decision was published on the court’s website.
The file was returned to the antitrust authority for a new ruling. The decision is not final and can be appealed to a five-judge panel.
The CPC suspended the deal in 2018 on the grounds that if it is concluded, there will be a concentration that will affect the electricity market. That is why Varbakova left the management of her solar energy companies, which were her main asset, and submitted a second notification to the CPC. However, it was not considered.
Thus, the deadline for finalizing the deal, agreed between Inercom and CEZ, expired and the Czech company withdrew from the deal, and Varbakova lost the bank guarantee in the amount of EUR 5 million.
Currently, the electricity supplier in Western Bulgaria is in the process of being acquired by the Eurohold Group, which was also initially refused by the CPC on the grounds that the new owner could hypothetically provide guarantees to energy companies when trading on the electricity exchange. This was challenged before the SAC and the deal was eventually approved by the antitrust and energy regulators.
In the decision of the three-member panel, announced today, the Supreme Judges agreed that the market share of the joint group of Inercom and CEZ would not be sufficient to justify the possible existence of a dominant position. According to the appointed and accepted forensic economic expertise, the share of the united group on the basis of installed capacities in photovoltaic power plants is 2.517%. This amount is much lower than the requirement of the Methodology for a total market share of at least over 15% of the enterprises-participants in the respective market, the decision says. According to the same methodology, a disturbing total market share of the parties to the concentration could be in excess of 40%. In this case, the share of the merged group is much lower even than the 15%, for which it is assumed that the market share of the companies – participants in the respective market is not worrying and the concentration would not significantly impede competition, the decision reads.