Chiriţoiu: "The takeover of E.On Romania assets by the hungarian company MVM will end up on the table of the CSAT"

The transaction through which the Hungarian company MVM wants to take over the assets of E.On in our country will end up on the table of the Supreme Council for National Defense, said Bogdan Chiriţoiu, president of the Competition Council, yesterday, on the occasion of the press conference he held to present the balance sheet for last year of the public institution he leads. The head of the Competition Council indicated that only on Tuesday the European Commission informed him that the national competition authority - that is, the institution led by Bogdan Chiriţoiu - must deal with this case and he also said that, after receiving all the documents from MVM and E.On, they will be sent to the member institutions that are part of the Commission for the Examination of Foreign Direct Investments (CEISD), but he believes that an opinion from the Supreme Council for National Defense will also be necessary.

Bogdan Chiriţoiu stated: "This investigation will probably reach the CSAT. I would be surprised if the transaction is approved without going through the CSAT. However, I find it hard to believe that this operation will be considered unproblematic from a national security point of view and I believe that the CSAT will be notified."

However, Karoly Matrai, CEO of the Hungarian company MVM Zrt. (MVM Group), also stated yesterday, quoted by Portfolio.hu, a statement taken over by Reuters and Agerpres, that he will finalize the transaction regarding the takeover of the majority stake in the gas and electricity supply division of E.ON Energie Romania in June or July. We recall that the MVM group signed an agreement in December last year regarding the acquisition of the solutions division for households and customers of the company E.ON in Romania. According to this agreement, MVM will acquire a 68% stake in E.ON Energie România and a 98% stake in E.ON Asist Complet. The transaction is expected to be completed in 2025, after obtaining all necessary approvals from the competent authorities. The two companies have decided not to disclose the value of the transaction.

We would like to point out that in mid-January, the Ministry of Energy notified the Foreign Direct Investment Review Commission (CEISD) regarding this transaction. The Ministry identified multiple aspects that require an in-depth analysis, regarding the impact of the possible transaction on Romania's national security. Among the main reasons for notifying the CEISD are: MVM's ties with the Russian Federation; the risk of the subsequent transfer of E.ON Energie România shares to non-EU entities; risks to the company's data and the personal data of over 3 million users; transparency issues of the buyer.

E.ON Energie România is one of the largest gas and electricity suppliers in Romania, serving approximately 3.4 million customers.

During the press conference, the President of the Competition Council also referred to the capping-compensation scheme in the energy sector, which should end on April 1, 2025 and be applied only to truly vulnerable consumers. From the point of view offered by Bogdan Chiriţoiu, only one idea can be derived, namely that the central authorities, citizens and economic agents are not prepared for the lifting of the capping, but are waiting for its continuation.

Bogdan Chiriţoiu said: "The energy market must be able to function normally, without capping. Energy prices are now stabilized compared to those existing a year and a half ago, and under these conditions, the Government should withdraw the exceptional measures from the market. However, I believe that we must look carefully at vulnerable consumers, to determine exactly who they are, but also at the industry, its needs, at energy-hungry companies, whose activity may be negatively impacted by the lifting of the cap, companies that could lose their competitiveness due to the abandonment of this exceptional measure. We also believe that market regulation measures are not enough, especially since in the energy market you can do things that are prohibited in all other markets, that is, you can trade energy that you do not currently have and for which you do not present any proof that you can have or produce it".

He also mentioned the problems in the energy balancing market, the problems posed by high balancing prices for energy suppliers and stated that among the solutions would be capping the maximum level of these prices or eliminating very high prices when calculating the balancing tariff.

Also in the field of energy, the president of the Competition Council indicated that on Tuesday he had a discussion with representatives of DG Competition to postpone the deadline for closing the lignite mines at the Oltenia Energy Complex until the commissioning of the future natural gas-based energy production units. Bogdan Chiriţoiu stated that, after the first discussion, the impression was that the officials in Brussels were not opposed to such a measure, but that they would give us a derogation for only 2 years, and anything beyond this term would lead to difficult negotiations.

"It is not simple, but it can be done", Bogdan Chiriţoiu stated.

• The investigation into a possible collusion between banks to fix the ROBOR level is nearing its end

The completion of the investigations carried out by the Competition Council regarding the banking system in our country seems to be in the hands of divinity, even if one of them - namely the one regarding the manipulation of the ROBOR index - should be completed by the end of 2025, according to Bogdan Chiriţoiu, the president of the public institution.

"Somewhere around the middle of the year, the control team for the banking investigation on Robor will finish the report, but God knows when we will make a decision because the respective document must be verified, sent to the Government, to the European Commission - DG Competition, it may undergo revisions, etc. I hope that at the end of this year we will be able to make a decision regarding the respective investigation", stated Bogdan Chiriţoiu.

The President of the Competition Council stated that, initially, he wanted this investigation and the one regarding the credit conditions to be united into one, but he found that the checks regarding a possible understanding of the commercial banks regarding the ROBOR level were carried out more quickly and that the control team's report will be ready in the coming months.

The Head of the Competition Council also mentioned the takeover of Telekom Romania by Digi and Vodafone and pointed out: "We are interested in ensuring that, following the takeover, neither of the two companies becomes extremely strong enough to impose itself on the market. From this point of view, we would like Vodafone to grow. We want Digi and Vodafone to be strong companies to compete with Orange, but not too strong to impose high tariffs, because we want to continue to have good services, very good coverage at national level and low prices. We would have liked, from a competitive point of view, to continue to have four service operators in the telecom market, unfortunately we will remain with three companies, but we still want to have good signal quality, to implement 5G technology, to have cheap prices and to increase the level of coverage. These are the conditions that we want to put on Digi and Vodafone when taking over Telekom Romania. And there would be one more: to keep the possibility of new service operators entering the telecom market".

He specified that the transaction in question would be finalized in May, although Telekom would like this to happen by the Easter holidays.

• Positive balance for 2024

From the data presented yesterday by Bogdan Chiriţoiu and contained in the report prepared by the institution he leads, we noted that in 2024, the Competition Council analyzed and authorized 104 transactions (economic concentrations), the most in the last 21 years. The largest transaction was the takeover of Profi by Mega Image, which was made after the Competition Council imposed conditions regarding the delisting of suppliers.

The competition authority completed 18 investigations last year, the most in the last seven years, with fines totaling 368.54 million lei (73.7 million euros). Of this amount, approximately 63% represent sanctions applied for agreements between companies. Among the most important fines are:

- 217.9 million lei (43.7 million euros), for Holcim Romania SA, Romcim SA and Heidelberg Materials Romania SA, for coordinating pricing policies.

- 128.4 million lei (25.81 million euros), for Boehringer Ingelheim RCV Gmbh &Co KG (Austria), for abusing a dominant position on the Romanian market for medicines intended for the treatment of chronic obstructive pulmonary disease (COPD).

- 5.96 million lei (1.2 million euros), for six companies active on the book supply market, as well as the Romanian Publishers Association (AER), for participating in an anti-competitive cartel.

- 3.49 million lei (approximately 700,000 euros): The National Supervisory Council for the Railway Domain (CNSDF), within the Competition Council, sanctioned Grup Feroviar România for not complying with the measures imposed by the national regulatory body and not allowing access to all railway transport operators to the service infrastructures it operates in the Palas railway station in the Constanţa Port area.

- 3.35 million lei (670,000 euros), for OKI Europe Limited, for limiting exports and fixing resale prices, as well as monitoring them, during the period October 2015 - March 2020,

In 2024, the Competition Council launched 14 investigations in areas such as energy, IT (Cisco and its partners), the sporting goods market (Nike European Operations Netherlands B.V), the dental services market. Of the total number of investigations opened, 57% are cartel agreements. In the field of unfair competition, the first investigations were launched into unfair commercial practices between companies in the agricultural and food supply chain (Profi - Prăvălia D'art and which were concluded through mediation of the parties) and the exploitation of a superior negotiating position (the market for motor vehicle repair services covered by RCA insurance and the sale of liquefied medical oxygen). At the end of 2024, 49 investigations were ongoing into possible infringements of competition law, of which approximately half concerned cartel agreements.

Regarding the decisions to sanction companies by the Competition Council, or rather the decisions contested in court, the report presented by Bogdan Chiriţoiu shows that 94% of the final decisions pronounced by the High Court of Cassation and Justice are favorable to the competition authority, and 96% of the contested fines were maintained at the same value by the courts.

In 2024, the Competition Council also contributed to the development and approval at European level of support measures granted both from European funds (including PNRR) and from national funds (state aid), in a total amount of over 81.6 billion lei, getting involved in the restructuring of state-owned companies, CFR Marfă (which from 2025 will be called Carpatica Feroviar) and Tarom.