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News > International
Power deals in peril
April 14, 2000: 8:27 a.m. ET

EU would block Viag-Veba tie; German probe threatens RWE-VEW deal
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LONDON (CNNfn) - Antitrust officials Friday threatened to block two huge mergers in the German power industry, citing concerns that the deals would create a duopoly controlling 80 percent of the country's electricity generating and distribution market.
    The European Commission, the executive arm of the European Union, said it would block the planned 14.3 billion ($13.7 billion) combination of diversified utilities Viag and Veba unless they addressed its concerns about the impact on competition.
    The announcement came just hours after the German antitrust office said it would block RWE's planned 3.7 billion ($3.5 billion) takeover of its smaller domestic rival VEW.
    The two deals would create Europe's two largest listed power companies, reflecting the pressure for consolidation since the European Union opened up the region's electricity market to broader competition was in 1999, sending prices tumbling.
    graphicThe Commission is not due to issue a final ruling on the Veba-Viag deal until June 18, but its warning contrasts sharply with recent comments by the merger partners in which they expressed confidence they would secure regulatory clearance.
    Veba (FVEB) fell 1.1 percent to 53.40 at midday in Frankfurt while Viag (FVIA) was off 2.2 percent at 21.15.
    RWE said it was in talks with the Bundeskartellamt, Germany's antitrust authority, and expected to reach agreement within weeks, though it declined to give any details on what concerns the cartel office had raised.
    RWE (FRWE) shares were little changed at 36.70 after the announcement. VEW (FVEW) was unchanged at 196. Back to top

  RELATED STORIES

RWE to cut 12,500 jobs - Feb. 24, 2000

Veba, Viag tweak merger terms - Dec. 09, 1999

  RELATED SITES

RWE

VEW

European Commission

Bundeskartellamt

Veba

Viag


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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.