Deutsche Boerse’s EEX Faces EU Probe of Nasdaq Unit Takeover

(Bloomberg) -- European Energy Exchange AG faces an in-depth European Union probe into its plans to buy Nasdaq Inc.’s European power arm, amid competition concerns over the deal to cement its role as the biggest electricity exchange in the world.

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The European Commission fears the Deutsche Boerse AG unit’s plan could help create a dominant player in the spot market for electricity, according to people familiar with the matter who spoke on condition of anonymity. The EU decision to escalate their probe — which places more regulatory scrutiny on the deal — is expected to come by the current deadline of June 26.

EEX has over the past few years expanded in both the US and Asia as the global electrification drive spurs interest in trading power and emissions. The firm also offers trading in agricultural commodities.

In late May, EEX filed unspecified concessions to the bloc’s regulators which failed to allay the EU’s concerns, the people added.

So-called phase 2 probes add about 90 working days to deal reviews. Regulators typically demand remedies to solve competition concerns but sometimes also decide to give their unconditional approval if initial concerns are shown to be unfounded.

While the proposed buyout doesn’t meet standard thresholds for an EU review, several member states urged the Brussels-based commission to vet the transaction — invoking new rules that allow probes of smaller deals that could still hamper fair competition.

The commission, EEX and Nasdaq all declined to comment.

(Updates with EEX response in last paragraph)

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