Indecopi Authorizes Business Concentration Operation with Conditions
Indecopi, through the Commission for the Defense of Free Competition (CLC), has decided to authorize the acquisition of Enel Distribución and Enel X by the company China Southern Power Grid International. However, this acquisition comes with certain conditions.
According to a statement released by Indecopi, the decision to authorize the acquisition was made in order to guarantee competition between electricity generation companies for the supply of regulated users. The aim is to prevent the rates of the public electricity service from increasing in the future due to reduced competition.
The decision also sets conditions for Enel Distribución, ensuring that when it needs to supply energy from its related companies, it does so through a transparent and competitive process in the presence of a notary, or through the bidding mechanism administered by Osinergmin. Once electricity supply contracts have been signed, Enel Distribución will not be able to make modifications that imply an increase in power, price, or term.
This authorization comes after CSGI HK requested permission to acquire Enel Distribución and Enel X last year. However, it was confirmed that CSGI HK is part of the same economic group as other companies, which raised concerns about Enel Distribución purchasing energy to supply its regulated users.
The CLC has placed conditions on the operation to ensure compliance with the rules that Enel Distribución must observe when contracting electricity to serve the electricity supply of its regulated clients.
“The procedure took place within the framework of Law 31112, Law that establishes the Prior Control of Business Concentration Operations, which grants powers to Indecopi to authorize, authorize with conditions or deny concentration operations that occur in any of the economic sectors of the country, which will preserve the conditions of competition in the market, for the benefit of citizens,” Indecopi stated.
The public version of the CLC resolution will be made available once the document becomes final, unless the requesting company appeals the decision before the Indecopi Court.