CEZ - government reportedly considers to change its decision on merger of CEZ and distributors

Komentář
Investiční bankovnictví KB

      Government reportedly considers changes to its original decision about merger of CEZ and the distribution companies following the Antimonopoly Office’s ruling, which allowed CEZ to control only four out of eight distributors. First scenario would leave the original government decision unchanged – CEZ will buy eight distributors and it will comply with the ruling of the Antimonopoly Office. According to second scenario – CEZ would buy only four distribution companies and the remaining four would sell the government. The last scenario would leave CEZ without any control over the distributors. Moreover, management of CEZ should present its decision whether to appeal the ruling of the Antimonopoly Office on Thursday.

       We fully agree with the second scenario. The purchase and following resale of the distributors represent unnecessary administrative step, which could be disadvantageous for CEZ. The company has to sell the stakes in the distribution companies to some deadline, which will lead to a pressure on price. Moreover, the number of potential investors is limited to foreign utilities, which built up stakes in the distributors. The third proposal is the worst case scenario.

      

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