COMPETITION COUNCIL GIVES MERGER CONTROL CLEARANCE TO A JOINT VENTURE BETWEEN UAB MODUS ENERGIJA AND UAB IDAVANG

On February 11, the Competition Council (the Council) gave merger control clearance to a joint venture between UAB Modus Energija and UAB Idavang (former Saerimner) for acquiring joint control of 10 companies, namely, UAB Menergija, UAB Nenergija, UAB Psenergija, UAB Senergita, UAB Venergija, UAB Zenergija, UAB Cenergija, UAB Jenergija, UAB Kenergija and UAB Lenergija.

UAB Modus Energija controls some energy sector companies. The enterprise is also engaged in project management, development, investments and ongoing maintenance in the area of renewable energy and alternative fuels‘ use in the transport sector.

UAB Idavang and the related companies are engaged in breeding and sale of pigs and piglets as well as renovation of pig-breeding complexes.

After the transaction is completed, the aforementioned 10 companies intend to produce biogas and use it to produce electricity and heat that will later be sold to the companies of Idavang group and also used for the needs of the biogas-producing companies themselves.

Parties to the merger indicated that when implementing the merger they assume non-competition obligations.

Having evaluated all the circumstances related to the merger, the Council acknowledged that the intended merger will not create or strengthen the dominant position, or significantly restrict competition in the relevant markets.

Notes

(1) Mergers (Concentrations) are cases when two independent undertakings merge or when one undertaking gains control over another. As these changes may restrict effective competition in a relevant market, mergers involving firms that exceed turnover limits established in the Law on Competition must be cleared by the Council. The Council authorises only such mergers that will not have significant adverse effects on the conditions of competition.

(2) Control means any rights arising from laws or transactions that entitle a legal or natural person to exert a decisive influence on the activity of an undertaking, including the right of ownership to all or part of the assets of the undertaking or the right to use all or part of such assets; other rights which confer a decisive influence on the decisions or the composition of the undertaking’s personnel.

(3) Clearance of the merger includes undertakings’ assumed additional obligations on the restriction of activity that are necessary and directly related to the implementation of the merger and are in compliance with the principles established by the European Commission. However, when analysing the question of whether or not to clear the merger, the Council does not evaluate the additional activity restrictions provided in the merger notifications. Pursuant to the principles of the European Commission, parties to the merger have to self-assess whether activity restrictions are necessary and directly related to the implementation of a specific merger.

(4) Clearance of the merger that includes additional restrictions does not eliminate the right of the Council to start an investigation on the restrictions determined by the parties or other actions that are not necessary or directly related to the implementation of the merger.