CEZ - Antimonopoly Office stick to its previous decision on merger of CEZ and the distributors

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Investiční bankovnictví KB

      Antimonopoly Office said that it sticks to its previous ruling on merger of CEZ and distribution companies only with minor adjustments, which gives green light to the transaction. CEZ has to fulfill the following conditions:

       1) sell its stake in Jihoceska energetika, Jihomoravska energetika a Prazska energetika

       2) sell its stake in another distribution company based on its own selection

       3) sell the remaining 34% stake in CEPS

       Antimonopoly Office also decided to postpone the deadline, when CEZ has to meet these conditions, but it did not reveal any details. Originally, the deadline was set on 11 December. The Office also did not say whom CEZ should sell its 34% stake in CEPS. Sale of the shares that CEZ has to sell does not need an approval from the Antimonopoly Office.

       CEZ can finally complete merger with the distributors, which is important for maintaining its position on domestic market. We expect that the merger with four distributors will enable CEZ to increase sales of electricity on domestic market and consequently increase utilization of its generating capacities, which will lead to saving on fixed costs. However, total costs of the acquisition will increase due to expected buyout offer for minority shareholders. The postponed deadline reduces the risk that CEZ would be under pressure to meet the conditions, which would consequently raise doubt that CEZ would achieve fair price on its stakes.

      

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