William Malcolm

Bulgarian Competition Watchdog Clears Sale Of CEZ Assets To Eurohold

The Bulgarian Antimonopoly Office has approved the sale of CEZ’s Bulgarian assets to Eurohold for 335 million euros. The office took up the matter after the administrative court overturned its decision last year, which blocked the transaction. CEZ and Eurohold signed an agreement on the sale of assets last June. The transaction has yet to be approved by the Bulgarian energy regulator.

The assets sold include a distribution company that supplies electricity to more than two million Bulgarians, making the transaction a politically sensitive issue. “The Bulgarian Commission for the Protection of Competition has granted Eurohold Bulgaria permission to acquire CEZ Group subsidiaries in Bulgaria,” Eurohold said today. Last October, the commission concluded that the newly formed group would gain a significant competitive advantage in the insurance and energy markets and blocked the transaction.

“We know that the Bulgarian Commission for the Protection of Competition has decided, but a written copy of its own decision has not yet been published,” CEZ spokeswoman Alice Horakova said. “Once the decision takes legal effect, our next step will be to request the approval of the Bulgarian Regulatory Authority (KEVR),” she added.

The package of CEZ companies sold includes CEZ Bulgaria, CEZ Elektro Bulgaria, CEZ Razpredelenie, CEZ Trade Bulgaria, CEZ ICT Bulgariaion, Free Energy Project Orešec, and Bara Group. The most important of these is the distribution company CEZ Razpredelenie Bulgaria.

CEZ entered Bulgaria in 2004, when it bought three distribution companies for 281.5 million euros. However, due to ongoing disputes with local authorities, which have been going on since February 2013, when they decided to leave. The company received millions in fines for alleged abuse of a dominant position. In 2016, ČEZ initiated international arbitration against the Bulgarian government for hundreds of millions of euros due to interventions that, according to the company, damaged its business. The arbitration proceedings have not yet ended.

The sale of Bulgarian assets results from a change in CEZ’s strategy, the company wants to focus more on the Czechia and Central Europe and renewable energy sources in areas such as Germany and France. Last week, CEZ Group announced that it had signed an agreement to sell most of its Romanian assets to the London company Macquarie Infrastructure and Real Assets (MIRA). The companies did not state the price.

CEZ’s expansion abroad has been repeatedly described as unsuccessful by Prime Minister Andrej Babis. The majority owner of ČEZ is the state, which owns 70 percent through the Ministry of Finance.