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Bulgarian regulator revisits the 335 million euros asset sale of CEZ to Eurohold

Bulgaria’s competition regulator has re-opened the inquiry into Czech utility’s planned 335 million euro deal to sell its local assets to financial and insurance group Eurohold Bulgaria. The Commission for Protection of Competition (CPC) acted after the Sofia Administrative Court last month revoked the regulator’s earlier ban on the deal citing major procedural breaches.

Bulgarian news portal Mediapool revokes that a year ago Bulgaria’s competition regulator banned the transaction, saying that it would create conglomerates in Bulgaria’s insurance market and electricity sector. The regulator argued that “the combined resources and market positions of the two groups in the electricity and insurance sectors create prerequisites for the notified deal to lead to the establishment or strengthening of a dominant position”.

Eurohold then challenged the decision that the barred it from buying the Bulgarian assets of CEZ in court. In July the Sofia Administrative Court overturned CPC’s earlier decision and concluded that the regulator eschewed any in-depth analysis and did not give the companies an opportunity to present proposals aimed at preserving competition on the markets affected by the deal.

CEZ board approved the sale of the group’s assets in Bulgaria, which include the electricity distribution company that services the Western part of the country and the capital city of Sofia, in February 2018. CEZ’s earlier deal with Sofia-based Inercom for the sale of the group’s assets also fell through as the seller failed to obtain approval from the Bulgarian competition regulator.

Eurohold signed a deal with CEZ last June to acquire a power distributor providing electricity to more than 2 million people, along with other energy assets for 335 million euros.

CEZ also divests its assets in Romania. The company estimated the aggregated equity of its Romanian subsidiaries, which are up for sale, at 1.07 billion euros.

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