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Acquisition by EDF of London Electricity

United Kingdom
05/08/1999
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EDF planned to purchase from Energy Corporation (of the USA) all the shares of LEHL (London Electricity Holding No. 1 Limited). EDF is the French wholly state-owned electricity utility group. It has operations in Italy, Portugal, Sweden and Spain, and supplies electricity to the UK through the France/UK interconnector cable. LEHL mainly distributes and supplies electricity in England and Wales through its wholly owned subsidiary, London Electricity (LE). LE is one of the twelve regional electricity companies operating in England and Wales.

The Commission confirmed that the activities of the electricity industry can be divided into generation, transmission, distribution, and supply of electricity. Each of these product markets requires different assets and resources and the market structures and conditions of competition are different for each.

The Commission decided not to oppose the proposed acquisition. The parties’ market share in the market for the supply of electricity in England and Wales to customers with a demand of over 100 kW is low. The operation will not create or strengthen a dominant position in this market. In the markets for supply to customers with a demand of less than 100 kW and for distribution within LE’s area, LE has a dominant position. This is because customers with a maximum demand of less than 100 kW had until recently to source their electricity from LE and because it owns the only distribution network. However, these markets are heavily regulated and Director General of Electricity Supply (DGES) imposes maximum prices in both cases

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