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3CZ - CEZ Distribution Bulgaria AD News Story

BGN256 4.0  1.6%

Last Trade - 15/01/21

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

UPDATE 1-Regulator blocks Eurohold's buy of CEZ's Bulgarian assets

Thu 24th October, 2019 4:36pm
(Adds details, background)
    SOFIA, Oct 24 (Reuters) - Bulgaria's competition regulator
on Thursday blocked insurance and financial group Eurohold's
 4EH.BB  acquisition of the Bulgarian assets of Czech utility
CEZ  CEZP.PR , saying the 335 million euro deal could hinder
    The regulator, which launched in-depth inquiry into the deal
earlier this month, said the acquisition would give the new
group a serious competitive advantage both on the energy and the
insurance markets in the Balkan country.
    "The economic strength and the market positions of the
merging companies create preconditions for an establishment or
an increase of a dominant market position of the new group as
well as to significant hindering of the efficient competition on
the relevant markets," the regulator said in a statement.
    The regulator argued Eurohold has a significant share of the
market in insurance guarantees, while some of CEZ's Bulgarian
companies are active in energy trades, which require bank and
insurance guarantees.  urn:newsml:reuters.com:*:nL5N26V48J
    The decision can be appealed at court and Eurohold said in a
statement its supervisory board would decide whether to do that.
    This is the second time the anti-trust regulator has blocked
CEZ's attempts to exit Bulgaria, where it controls a power
distributor providing electricity to over 2 million people,
along other energy assets. 
    CEZ said Bulgaria was putting "obstacles" to the sale
despite Eurohold being a respected company that has so far not
done business in the energy sector. 
    "Finalising the sale of Bulgarian assets in so unpredictable
environment is a great challenge," CEZ said in a statement.
     Eurohold had earlier defended the deal, pointing out it
does not have a leading market position in the insurance market
of such guarantees and that deals between related companies were
restricted and at times even banned by law.  urn:newsml:reuters.com:*:nL5N27039T
    Last year, CEZ signed a deal with a small Bulgarian energy
company to offset its Bulgarian assets, but this was also
blocked by the regulator.

 (Reporting by Tsvetelia Tsolova, additional reporting by Jan
Lopatka in Prague, editing by Deepa Babington and David Evans)
 ((tsvetelia.tsolova@thomsonreuters.com; +359-2-93-99-731;))
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