Competition authority head expects MVM - E.ON deal to be referred to CSAT

 The deal by which Hungary's state-owned MVM Group intends to acquire from E.ON gas and electricity provider E.ON Energie Romania will probably be put up for discussion in the Supreme Council for National Defence (CSAT), Competition Council president Bogdan Chiritoiu told a press conference on Thursday."This investigation will probably end up on CSAT's table. I think this is what will happen. (...) Having also seen some public stances of members of the Foreign Direct Investments Revision Committee (CEISD), I find it hard to believe that the deal will be considered unproblematic and not requiring in-depth investigation. So, I think that the CSAT will be notified," Chiritoiu said.The transaction between E.ON and MVM is pending three approvals: the one from the Foreign Direct Investments Revision Commission, that of the Competition Council, and that of the European Commission. However, according to the president of the competition authority, the European Commission will hand over the case to the Competition Council.Chiritoiu specified that as far as the Foreign Direct Investments Revision Commission is concerned, the member institutions have 21 calendar days "to react"."The procedure is as follows: they notify us via the secretariat. The secretariat, when it is satisfied that it has all the information, that the approval request is complete, sends it to all member institutions, which are essentially those in the CSAT, and these institutions have 21 days to express a point of view. That point of view may be 'we want more information, we need some other input'. It depends on how good the application is. If it is poorly made, if information is missing and the company does not provide adequate data, it may take a long time," said Bogdan Chiritoiu.Asked if the transaction has already been discussed within the CEISD, he said it was not, and is still "in preparation".In mid-January 2025, the Energy Ministry announced having notified the Foreign Direct Investments Revision Commission about the transaction through which the Hungarian state-owned MVM Zrt. (MVM Group) intends to take over the gas and electricity supply division of E.ON Energie Romania.In a press statement on January 15, the Energy Ministry indicated that, following a rigorous analysis, it had identified multiple aspects requiring in-depth consideration of the impact of the potential transaction on Romania's national security. The main reasons for the CEISD notification are the Hungarian company's links with the Russian Federation, the risk of the subsequent transfer of E.ON Energie Romania shares to non-EU entities, risks to the company's data and the personal data of over 3 million users, but also issues with the buyer's transparency.With regard to MVM Zrt.'s ties with the Russian Federation, the Energy Ministry mentions that the company has extensive commercial relations with Gazprom and Rosatom, Russian companies under international sanctions, through which Hungary maintains a high dependence on Russian natural gas and nuclear technology."Elements of 'decisive influence, shadow control, influence by economic dependence and effective control' have been identified, both within MVM Group, and the company through which the purchase of E.ON Energie Romania's controlling stake is intended," the cited release said.Also, the Energy Ministry argues that the examination of the documentation submitted by MVM showed that the contractual structure and the transaction clauses make it possible for the stake purchased from E.ON Energie Romania to be subsequently sold to entities outside the European Union or to other entities that do not appear as initial parties to the transaction, a contractual vulnerability that may facilitate the indirect transfer of control to economic or political actors that do not meet the rigors and compliance standards imposed by European legislation in the energy field and transaction transparency.The institution cautions of the lack of legal and contractual guarantees in protecting the data of E.ON Energie Romania and the personal data of over 3 million Romanian customers.In addition, the Energy Ministry notes the conflict with national energy strategies, indicating that the information in MVM's documentation regarding the cut of natural gas consumption contradicts Romania's Energy Strategy and the 2024-2028 Governing Program, which prioritize expanding the population's access to gas networks and capitalizing on domestic resources.MVM Group, Hungary's second-largest company and the sixth-largest in Central Europe, signed in December 2024 an agreement regarding the purchase of the household and customer solutions division of E.ON in Romania.According to the agreement, MVM is to acquire a 68% stake in E.ON Energie Romania and a 98% stake in E.ON Assist Complet, a release of the Hungarian group said.The deal with an undisclosed value is expected to be completed in 2025, after all the necessary approvals from the competent authorities are obtained.MVM CEO Karoly Matrai told news portal Portfolio.hu on Thursday that the Hungarian state-owned group MVM had no intention of divesting the companies it plans to acquire in Romania, and that MVM would supply its Romanian customers using local gas sources.E.ON Energie Romania is one of Romania's largest gas and electricity providers, serving around 3.4 million customers. E.ON Assist Complet is a regional company specialized in energy services, offering solutions for infrastructure installation and maintenance.