Estonian competition watchdog rejects Eesti, Nelja Energia merger complaint

Wind Turbines at Paldiski Wind Farm (picture is illustrative).
Wind Turbines at Paldiski Wind Farm (picture is illustrative). Source: Eesti Energia

The Estonian Competition Authority on Monday rejected a complaint by Eleon Group, an energy company owned by Andres and Oleg Sõnajalg, which contested the authority's decision to allow the merger of renewable energy producer Nelja Energia and the Estonian state-owned energy group Eesti Energia.

The Estonian Competition Authority said that it had not violated the law and based its decision on normal practice.

"The Estonian Competition Authority disagrees with Eleon Grupp's claims," Maarja Uulits, head of PR at the competition watchdog, told BNS on Monday. "The authority has complied with the law both in informing about making a decision as well as in making the decision public. The Estonian Competition Authority can only make a decision public once trade secrets have been excluded."

Eleon Grupp announced on Friday that they consider the merger of Nelja Energia and Eesti Energia inadmissible and will contest the decision in court. The company also believes that the Estonian Competition Authority may have violated the law.

"It is important to bear in mind that the proceedings on merger control do not resolve possible bottlenecks in the field or other issues not directly related to the merger in question," Uulits said. She added that it is, of course, possible to contest the decision in court, however she noted that the decision is made and publicised pursuant to the law and based on normal practice.

Eleon claimed that the transaction between Eesti Energia and Nelja Energia was carried out in secret. According to the company, Eesti Energia announced in the media that the transaction was completed on 6 November, right after receiving permission for the merger. The Estonian Competition Authority informed the public of the merger decision on 7 November, and persons who submitted objections in the merger procedure were not informed of the decision at all, Eleon said.

Silja Holsmer, an attorney at Supremia representing Eleon, said in a press release that the Estonian Competition Authority has since told them that merger participants will announce on 19 November what kind of data they consider to be a trade secret in the merger decision, and only then will the Estonian Competition Authority decide in which form to forward the decision to Eleon.

"At the same time, it is clear that there was enough time in the framework of the merger procedure to determine what the participants' trade secrets are and are not, and for those submitting objections, the Estonian Competition Authority asked for the immediate submission of relevant information right after the submission of objections in early summer already," Holsmer said. According to the attorney, the authority was aware of the submitted objections and, through this, also the possible interest of market participants in contesting the decision with the aim of preventing the completion of the transaction.

"However, the Estonian Competition Authority has considered it necessary to inform only participants of the merger of the decision and to inform the public of it only after the transaction has taken place, leaving the decision unannounced to persons interested," she continued. "With the aforementioned, the effective protection of the rights of persons is significantly hindered."

Skinest Energia unhappy with merger as well

In response to a complaint by Estonian businessman Oleg Ossinovski's company Skinest Energia, Tallinn Administrative Court on Thursday suspended the decision with which the Estonian state-owned energy group Eesti Energia was allowed to acquire renewable energy producer Nelja Energia. Skinest Energia, a company held by Ossinovski, filed a complaint with the Tallinn Administrative Court a few days after the competition watchdog's decision calling for the annulment of the Estonian Competition Authority's decision and acknowledgement that the merger of Eesti Energia's renewable energy subsidiary Enefit Green and Nelja Energia is prohibited.

Skinest Energia is appealing for the Estonian Competition Authority to make a new decision with which the merger of the two companies would be prohibited or, as another alternative, the Competition Authority would be obligated to continue handling the merger of Enefit Green AS and Nelja Energia AS.

Along with the complaint, Ossinovski's company also submitted an application for preliminary legal protection, with which it sought the immediate suspension of the validity of the decision of the Competition Authority retrospectively and prohibit the entry into force of the merger of Enefit Green and Nelja Energia until the court verdict concluding the procedure of the court case in question enters into force.

On 8 November, the court ordered the suspension of the validity of the Estonian Competition Authority's decision and prohibited the entry into force of the merger of Enefit Green and Nelja Energia until 10 December.


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Editor: Aili Vahtla

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