Cartel Authorities Give Green Light to Oil Mergers

E.On AG and RWE, Germany’s leading utilities, on Thursday moved closer towards their goals of focusing on their energy activities when they received conditional antitrust clearance from the European Commission and the German Cartel Office for the petrochemical parts of twin German gas-station deals involving Shell Transport & Trading Co. PLC and BP PLC.

The deals involve E.On AG’s sale of its Veba Oel AG unit to BP, and the merging of RWE AG’s Dea gasoline chain with Shell’s German chain.

The deals – which are separate operations, but were examined together by the antitrust authorities – will allow leading utilities E.On AG and RWE to divest their oil holdings to focus on their core activities of gas and electricity.

Düsseldorf-based E.On will sell its Veba Oel/Aral subsidiary to U.K. oil giant BP PLC in exchange for BP’s 25.5% stake in German utility Ruhrgas AG.

E.On is also seeking a 60% stake in Ruhrgas through a full takeover of Bergemann GmbH.

RWE will enter a joint venture between its RWE-Dea petroleum unit and Royal Dutch/Shell Group, with the option of a complete divestment.

The Cartel Office said approval of the Shell/Dea deal was conditional on the disposal of 5.3% of their combined German service-station network.

BP and Aral, meanwhile, would have to dispose of 6.6% of their network.

Shell has further offered to allow third-party access at its Dutch Moerdijk terminal to an amount of ethylene totaling 250,000 metric tons, while BP has undertaken to sell off two of its three combined BP and Veba shareholdings in the ARG pipeline.

BP and E.On also said they would guarantee access to a connection pipeline between the ARG pipeline and ethylene consumers at Herne in Germany.

German analysts gave the thumbs-up to both moves. But the ruling hardly came as a surprise,"; said one trader.

If the antitrust authorities had ruled against the deal, then there would have been hell to pay for the share prices, traders agreed.

As it was, the RWE and E.On shares gained ground during the day on Thursday, but left the session in slightly negative terrain. RWE gave up 0.39% at 40.89 euros, E.On 0.26% at 54.70 euros.

Separately, RWE said it had agreed to acquire British gas producer Highland Energy Holdings in a move that will strengthen its gas production by giving it access to reserves in the British North Sea.

The acquisition is still subject to approval by the British Secretary of State for Trade and Industry.

Both RWE and the vendors, Highland’s shareholders, had agreed to keep the purchase price confidential. Today, Hamburg-based RWE-DEA AG signed an agreement with the shareholders of the UK-company Highland Energy Holdings Ltd. on the acquisition of all shares of the British gas producer.

The acquisition is still subject to approval by the British Secretary of State for Trade and Industry. The parties agreed to keep the purchase price confidential.