Hungarian company MVM, with majority state capital, announced on Monday that it has reached an agreement to buy the gas and electricity supply division of E.ON in Romania. According to the agreement, MVM will buy 68% of the shares of E.ON Energie România and 98% of the shares of E.ON Asist Complet.
The transaction is subject to obtaining the necessary approvals from the competent authorities, including the Competition Council. The two companies did not disclose the value of the transaction, which is expected to be completed in 2025. E.ON Energie România, a member of the German E.ON Group, is one of the largest gas and electricity suppliers in Romania, with a portfolio of approximately 3.4 million customers.
All operational activities of E.ON Energie România and E.ON Asist Complet will continue to operate normally. The supplier E.ON Energie România SA recorded a net profit of 133.5 million lei last year, after a loss of almost 360 million lei in 2022.
The company is controlled by E.ON, with over 68% of the capital, and the remaining 31.82% of the shares by the Romanian state, through the Ministry of Energy. The company raised business of 10.2 billion lei.
MVM is a strategic Hungarian company, controlled by the Viktor Orban government, which has bought several foreign companies present on the Hungarian market in recent years, including E.ON’s local portfolio in 2022. The group has a presence in 23 countries, with more than 19,000 employees and over 11 million household and business customers (including almost 2 million in the Czech Republic, Slovakia and Romania).
The Hungarian government is the sole shareholder of MVM, according to the independent rating agency Fitch, and an investigation by the Balkan Insider publication reveals that, through this company, Orban is trying to expand his economic influence in the Central and Eastern European region. The same publication wrote last year that MVM was interested in CEZ’s seven businesses in Romania, when the Czech state-owned company decided to sell them, but no deal was finalized.
Currently, MVM owns the electricity supplier and producer MVM Future Energy Technology in Miercurea Ciuc in Romania.
“The Ministry of Energy has taken note of the recent decision of two European companies, E.ON and MVM, with significant implications for the electricity and natural gas supply market in Romania. Although the supply component does not include critical infrastructure elements, the Romanian state will use all legal levers for the strict assessment of this possible transaction.
This transaction will now enter the complex approval circuit, both at national and European level, involving a detailed analysis of compliance with the competition rules established by Competition Law no. 21/1996 and those regarding foreign investments regulated by Emergency Ordinance no. 46/2022 on the measures implementing Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union, as well as amending and supplementing Competition Law no. 21/1996, the acquisition will also be analyzed by the Commission for the Examination of Foreign Direct Investments (CEISD), an institution that oversees strategic investments to protect Romania’s interests.
The complex structure of MVM’s commercial relations and sources of capitalization will be analyzed, including the Hungarian company’s capital flows, especially those from outside the European Union. Detailed and rigorous assessments are necessary and will be carried out within the Commission for the Examination of Foreign Direct Investments, to ensure that any transaction respects Romania’s economic and security interests. In the immediate future, the Minister of Energy intends to meet with MVM’s top management to understand their plans for the Romanian market, but also to explore opportunities in which local companies, with majority state capital, could play a significant role, in partnership, for the future development of the Romanian energy sector.
As is the case in any European Union member state, in Romania, energy security issues are a priority. In this context, increased attention will be paid to ensuring that this transaction respects the fundamental principles of energy security and free competition. At the same time, the Ministry of Energy emphasizes the importance of opening up to sincere and mutually beneficial regional cooperation, for the benefit of all parties involved,” says the Romanian Minister of Energy in a press release after the announced takeover agreement.