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3CZ - CEZ Distribution Bulgaria AD News Story

BGN256 4.0  1.6%

Last Trade - 15/01/21

Sector
Utilities
Size
Small Cap
Market Cap £224.3m
Enterprise Value £239.6m
Revenue £170.9m
Position in Universe 146th / 638

UPDATE 1-Competition watchdog to look into Eurohold's deal for CEZ's Bulgarian assets

Thu 10th October, 2019 3:15pm
(Adds details, background)
    SOFIA, Oct 10 (Reuters) - Bulgaria's competition watchdog
will carry out an in-depth inquiry into Eurohold's  4EH.BB 
planned 335 million euro ($369 million) deal to acquire the
local assets of Czech utility CEZ  CEZP.PR , it said on
Thursday.
    Bulgarian holding company Eurohold, active in insurance and
asset management, agreed the deal in June to acquire assets
which include a power distributor that provides electricity to
more than 2 million Bulgarians.
    The Commission for Protection of Competition said Eurohold
has a significant share of the market of insurance guarantees,
while some of CEZ's Bulgarian companies are active in energy
trade, which requires bank and insurance guarantees.
    The cost of such guarantees is significant and an economic
barrier to entering the electricity market, while the new group
will have a fast and financially beneficial access to such
guarantees, which can provide it with a a serious competitive
advantage, the watchdog said in a statement.
    "The deal, which involves particularly sensitive markets
such as electricity trade markets, raises concerns about 
efficient competition," the Commission for Protection of
Competition said.         
     The watchdog has four months to evaluate the impact of the
deal on the electricity market and decide whether or not to
approve it.
    Eurohold declined an immediate comment.
    On Wednesday, Eurohold said it did not see any concentration
issues and expressed hope that the acquisition can be sealed by
the end of the year.  urn:newsml:reuters.com:*:nL5N26S3IN 
    Last week, CEZ said that if the deal with Eurohold fails to
get the necessary approvals it would not make another attempt to
sell its Bulgarian assets.  urn:newsml:reuters.com:*:nL5N26P3A0
    In 2018, CEZ signed a deal to offload its Bulgarian assets
to local energy company Inercom but the competition watchdog
blocked it five months later.
($1 = 0.9079 euros)

 (Reporting by Tsvetelia Tsolova, editing by Deepa Babington and
Elaine Hardcastle)
 ((tsvetelia.tsolova@thomsonreuters.com; +359-2-93-99-731;))
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