Affected market: Electricity, gas, steam and hot water supply
The OFT’s decision on reference under section 33 given on 21 December
2006. Full text of decision published 28 December 2006.
Please note that square brackets indicate figures or text which have
been deleted or replaced with a range at the request of the parties for
reasons of commercial confidentiality.
Arcapita Bank B.S.C.(c) [Note 1] (Arcapita) is an
international investment firm with offices in Bahrain, Atlanta and
London, whose four principal lines of business are corporate investment,
real estate investment, infrastructure and energy investment, and
venture capital. Arcapita has a number of portfolio companies in the UK
including a [less than 10 per cent] interest in Zephyr Investments
Limited which is active in the development and operation of wind farms
in Great Britain.
Viridian Group plc (Viridian) is a public listed energy company
registered in Northern Ireland. Viridian's activities are conducted
through two principal subsidiaries: (i) Northern Ireland Electricity
(NIE) - regulated electricity businesses in Northern Ireland; and (ii)
Viridian Power & Energy Limited - an integrated company active in
energy generation in the Republic of Ireland (ROI), and supply, through
Energia. Energia is the market retail arm of Viridian, and supplies
electricity to non-domestic electricity markets in both Northern Ireland
and the ROI. Viridian's UK turnover in the financial year ended 31
March 2006 was £655 million.
On 6 October 2006, Arcapita announced its proposal to acquire, through
ElectricInvest Acquisitions Limited (‘ElectricInvest’), the entire
issued and to be issued share capital of Viridian. ElectricInvest is
currently wholly owned and controlled by Arcapita. The Transaction is
expected to complete by the end of 2006. The OFT received a submission
on 1 November 2006. The administrative deadline is 29 December 2006.
As a result of this transaction Arcapita and Viridian will cease to be
distinct. The UK turnover of Viridian exceeds £70 million, so the
turnover test in section 23(1)(b) of the Enterprise Act 2002 (the Act)
is satisfied. The OFT therefore believes that it is or may be the case
that arrangements are in progress or in contemplation which, if carried
into effect, will result in the creation of a relevant merger situation.
Viridian is active in the transmission and distribution of electricity
in Northern Ireland. It also operates transmission circuits
interconnecting the Northern Ireland and Republic of Ireland
transmission systems. Viridian (NIE) supplies electricity to domestic
customers and small businesses in Northern Ireland and Viridian
(Energia) supplies electricity to non-domestic customers in the Republic
of Ireland. Viridian (Energia) also holds a licence for the supply of
gas in Northern Ireland although it is not active in the supply of gas
in Great Britain. Neither is Viridian active in the generation of
electricity in the UK.
Arcapita holds a [less than 10 per cent] interest in Zephyr
Investments Limited which is active only in the generation of
electricity (by wind farms) in Great Britain. The parties therefore do
not overlap in any activities as a result of this transaction.
The OFT does not consider that the parties have any material overlapping
activities as a result of this transaction. Therefore the OFT does not
believe that any concerns arise from this transaction. Third parties
were not concerned.
Consequently, the OFT does not believe that it is or may be the case
that the merger may be expected to result in a substantial lessening of
competition within a market or markets in the United Kingdom.
This merger will therefore not be referred to the Competition Commission
under section 33(1) of the Act.
- Registered in Bahrain.