In May it was exactly twenty years ago that the Monopolies Commission sent the Federal Minister of Economics its opinion on the Eon/Ruhrgas ministerial approval procedure.
The Federal Cartel Office had prohibited the merger of the companies Eon and Ruhrgas.
The companies had applied for an exemption from the minister.
The obligatory opinion of the Monopolies Commission was critical.
Nevertheless, the ministerial approval was granted by the then Federal Minister for Economic Affairs, Werner Müller.
The merger took place in 2003.
The Eon/Ruhrgas case is still of interest today for various reasons.
On the one hand, it marks the beginning of an energy policy that spelled out the word “supply security” with the letters GAZ-PROM and is troubling us today.
On the other hand, the behavior of those responsible was characterized by contempt for the applicable law.
Thirdly, the ministerial approval was based on untenable allegations;
a discussion about it was not planned, legal recourse was eliminated.
Security of supply is a matter of public interest
A brief outline of the case: In 2002, Eon was the largest company in the German electricity industry, and Ruhrgas was the largest company in the German gas industry.
Ruhrgas (today Evonik) was founded in 1926 as a joint venture between various collieries in the Ruhr area to ensure the transport and sale of gas that was produced as a by-product in the coking plants of these companies.
Ruhrgas also had the largest network of long-distance gas pipelines in Germany.
Over the decades, the company had massively expanded its activities to include the procurement and sale of natural gas from abroad, primarily from Norway and Russia.
In 2002, Ruhrgas accounted for more than half of gas sales in Germany.
The Federal Cartel Office had prohibited the merger because it would further strengthen the already great market power of Eon and Ruhrgas in their respective markets.
Post-merger, Eon's position in the electricity markets will be strengthened by controlling the gas produced or imported by Ruhrgas, and Ruhrgas' power in the gas markets by guaranteed access to Eon and various Eon subsidiaries as buyers.
In the application for ministerial approval, the companies stated that the merger would significantly increase the security of Germany's supply of natural gas.
The supply of natural gas is still secured by contracts for some time, but after these contracts expire from 2020 it will not be guaranteed.
The merger will make it possible to counter foreign suppliers with greater strength and encourage them to grant more favorable conditions.
Eon's financial strength will help deepen its relationship with Russia's Gazprom by increasing Ruhrgas' stake in Gazprom from 5 to 10 percent and by investing in a new long-distance gas pipeline from northwestern Siberia to Germany.