On the face of it, the European Commission had some shocking news for shareholders of Eon and RWE in Germany, OMV in Austria and similar listed energy groups across the region. The Brussels regulator on Wednesday vowed to break up all energy suppliers that are also active in managing networks such as grids and pipelines. It argued that the combination of the two businesses stifled competition.
Given the Commission’s sweeping powers to initiate legislation, scrutinise mergers and pursue antitrust infringements, such a step is certainly not beyond Brussels’ reach. That would mean forcing some of Europe’s biggest groups not only to sell off priceless assets but also to face much sharper competition from smaller rivals.
And yet, this shocking news somehow failed to strike fear in the hearts of investors. RWE’s shares actually gained slightly, while Eon and OMV posted only minuscule falls that mirrored the broader market. What’s up? Don’t traders read the newspaper?
Gideon Rachman and his FT colleagues debate international affairs on