EC clears EnBW-ENI acquisition of Germany's GVS

The European Commission cleared the joint acquisition of German regional gas wholesaler Gas Versorgung Sueddeutschland (GVS) by German electricity firm Energie Baden-Wuerttemberg (EnBW) and Italian gas and oil firm ENI, the EC said.
The EC imposed conditions on the acquisition, however, since "it would have strengthened GVS' dominant position on the wholesale gas market in the Baden-Wuerttemberg region," the EC said.

In exchange for EC clearance, EnBW and ENI agreed to offer to terminate all long-term supply contracts with either GVS or EnBW or their subsidiaries, Neckarwerke Stuttgart (NWS) and EnBW Gas.
GVS controls about 90 % of the regional wholesale gas market in Baden-Wuerttemberg. Ruhrgas and Wingas supply the remaining 10 %. The concession given by EnBW and ENI could benefit rival Wingas.

Wingas is to complete construction of a new pipeline before the end of 2004 that will cross Baden- Wuerttemberg from east to west, the EC said. This would give Wingas access to the high-consumption Stuttgart area.
The release of clients from their long-term gas supply contracts with GVS would also open up the Baden-Wuerttemberg consumers for Wingas. The GVS joint acquisition also furthers ENI's advance into the German gas market.