Elf wins through on German deal
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BRUSSELS (Reuter) - The European Commission yesterday gave a consortium led by France's Elf Aquitaine permission to buy Germany's Minol, raising Elf's share of the eastern German petrol market to 75 per cent.
The Commission's merger watchdog said it had cleared the deal between the consortium of Elf and Germany's Thyssen, and the Treuhand privatisation agency, because both sides had given guarantees that solved potential competition problems.
Under the deal, the biggest so far by Treuhand in its sell-off of thousands of companies in the former East Germany, Elf will build a new refinery at Leuna, while managing two existing facilities at Leuna and Zeitz until the new plant is ready.
Treuhand will cover losses by the two refineries until they are dismantled when the new plant comes on stream, giving Elf a significant edge over its competitors.
This led the Commission to extract a pledge from the privatisation agency to ensure that Elf made no price distinction between supplies to its own and other outlets. Independent consultants will certify Elf's pricing and marketing policies. A Commission spokesman said the deal, in which the consortium has pledged to invest more than DM5bn (pounds 1.84bn) over the next four years, would give Elf some 495 filling stations in the east, out of a total of 1,340.
Despite the dominant market share, the Commission said it had approved the deal because competition was rising rapidly in the area as other oil firms moved in and began to set up distribution networks.
It said some 300 new filling stations had been built by other oil majors since 1990, with a further 350 under construction or in the final planning states.
As a further concession, Elf had to make legally binding offers to other petrol companies, granting them access to sufficient storage capacity on reasonable terms for two years, extendable in the absence of alternative solutions.
The rapid clearance of the deal comes at a good time for Bonn, still struggling to cope with the economic fall-out of German unification.
After the deal was signed in July, Elf's president, Loik le Floch-Prigent, said it would create 10,000 jobs in eastern Germany.
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