Press Release: Mergers: Commission prohibits acquisition of GDP by EDP and ENI

The European Commission decided on 9 December 2004 to prohibit the proposed acquisition of joint control over Gàs de Portugal (GDP), the incumbent gas company in Portugal, by Energias de Portugal (EDP), the incumbent electricity company in Portugal, and ENI, an Italian energy company because the deal would have impeded effective competition. After an in-depth investigation, the Commission concluded that the deal would strengthen EDP's dominant position in the electricity wholesale and retail markets in Portugal and GDP's dominant position in Portuguese gas markets. The concentration would thus significantly reduce or pre-empt the effects of liberalisation of the electricity and gas markets, and increase prices for domestic and industrial customers. Remedies proposed by EDP and ENI were insufficient to satisfy the competition concerns.