2001/519/EC: Commission Decision of 13 June 2000 on the compatibility of a concentration with the common market and with the EEA Agreement (Case COMP/M.1673 — VEBA/VIAG) (Text with EEA relevance) (notified under document number C(2000) 1597)

• Articles: 3

Article 1

The notified merger between VEBA AG and VIAG AG is, on condition that the commitments given by the notifying parties as set out in the Annex to this Decision are fulfilled (with the exception of the commitment referred to in section VI.2, second subparagraph, concerning the electricity sector), compatible with the common market and the EEA Agreement.

Article 2

This Decision is addressed to:

VEBA Aktiengesellschaft Benningsenplatz 1 D - 40474 Düsseldorf,

VIAG Aktiengesellschaft Briennerstraße 40 D - 80333 München.

Done at Brussels, 13 June 2000.

For the Commission

Mario Monti

Member of the Commission

(1) OJ L 395, 30.12.1989, p. 1; corrected version: OJ L 257, 21.9.1990, p. 13.

(2) OJ L 180, 9.7.1990, p. 1.

(3) OJ C 192, 10.7.2001.

(4) Turnover was calculated on the basis of Article 5(1) of the Merger Regulation and the Commission notice on calculation of turnover (OJ C 66, 2.3.1998, p. 25). Turnovers generated before 1 January 1999 were calculated using the average ecu exchange rate and converted into euro on a one-to-one basis.

(5) Case IV/M.1346 - EdF/London Electricity; Case IV/M.1606 - EdF/South Western Electricity.

(6) Case IV/M.1557 - EdF/Louis Dreyfus.

(7) For example Case COMP/M.1720 - Fortum/Elektrizitätswerk Wesertal.

(8) The customer group comprises those customers who were described as "tariff customers" prior to liberalisation, since they were supplied in accordance with the general tariffs (BTOElt) and the general supply conditions (AVBEltV).

(9) European Transmission System Operators are represented by the Union for the Coordination of Production and Transmission of Electricity (UCPTE).

(10) ETSO study: Proposal for the implementation of the cross-border tariffs for the year 2001, 27 March 2000.

(11) International exchanges of electricity, rules proposal by the European Transmission System Operators.

(12) For example Case IV/M.1720 - Fortum/Elektrizitätswerk Wesertal.

(13) BGBl. 1998 I No 23, 730.

(14) Articles 7(6) and 14(3) of the Directive.

(15) After a preliminary examination, the Commission has informed the associations that it has reservations about Associations Agreement II from the standpoint of Article 82 of the EC Treaty. It has reached the provisional conclusion that the T-component system leads to discrimination against individual customers of transmission services. In particular, according to the Commission, foreign suppliers of electricity are also discriminated against.

(16) See point 2.2 of the consortium agreement between Bayernwerk AG, PreussenElektra AG and RWE Energie AG of 22 August 1990.

(17) For example IWR-Stromtarifrechner at www.Stromtarife.de; Focus Heft 39/99, pp. 319 et seq.

(18) See the website of PreussenElektra (www.preussenelektra.de) on the Central European power index.

(19) IEA, Energy Policy of IEA Countries: Germany 1998 Review, www.iea.org/pubs/reviews/files/germany/02-germ.htm.

(20) Case COMP/M.1842 - Vattenfall/HEW.

(21) Parts of this text have been edited to ensure that confidential information is not disclosed; those parts are enclosed in square brackets.

(22) This figure can be estimated on the basis of the amounts supplied by Degussa to Lonza during the period in which the latter no longer produced sodium dicyanamide. Taking into account Lonza's own consumption, its volume of trade would be less than [...] tpa.

(23) Commission notice on the definition of relevant markets for the purposes of Community competition law (97/C 371/03).

(24) Case COMP/M.1383 - Exxon/Mobil.

(25) Case COMP/M.1383 - Exxon/Mobil.

(26) OJ L 204, 21.7.1998, p. 1.

(27) Case COMP/M.1383 - Exxon/Mobil.

(28) Source: BEB business report 1998; BGW statistics.

(29) Decision of 21 December 1994, Case IV/M.484 - Krupp/Thyssen/Riva/Falck/Tadfin/AST; decision of 20 August 1996, Case IV/M.760 - Klöckner/ARUS; decision of 4 February 1999, Case IV/M.1329 - Usinor/Cockerill Sambre; decision of 7 April 1999, Case IV/M.1369 - Thyssen Handel/Mannesmann Handel.

(30) Decision of 4 February 1999, Case IV/ECSC.1268 - Usinor/Cockerill Sambre; decision of 7 April 1999, Case IV/ECSC.1292 - Thyssen Handel/Mannesmann Handel.

(31) Decision of 7 April 1999, Case IV/M.1369 - Thyssen Handel/Mannesmann Handel.

(32) Decision of 4 February 1999, Case IV/M.1329 - Usinor/Cockerill Sambre; Case IV/M.1369 - Thyssen Handel/Mannesmann Handel.

Schedules & Appendices

ANNEX

EC MERGER CONTROL PROCEEDING VEBA/VIAG

COMP/M.1673

COMMITMENTS IN RESPECT OF ELECTRICITY

I. VEAG/LAUBAG

VEAG is owned 26,25 % by VEBA (PE) and 22,5 % by VIAG (BAG). RWE also has a 26,25 % shareholding and Energiebeteiligungs-Holding (consisting of BEWAG, HEW, VEW and EnBW) has a 25 % shareholding.

LAUBAG, a lignite producer, is one of VEAG's suppliers. VEBA (PE) holds 30 % of the shares in LAUBAG, and VIAG (BAG) 15 %. BBS Braunkohle-Beteiligungsgesellschaft (BBS) mbH holds the remaining 55 %. BBS is owned 18,2 % by Energiebeteiligungs-Holding (consisting of BEWAG, HEW, VEW and EVS), 71,8 % by Rheinbraun AG (which is wholly owned by RWE) and 10 % by RWE Energie AG. The mining interests which are leased to LAUBAG are co-owned by LAUBAG's west German shareholders in proportion to their holdings in LAUBAG. [...]

1. If the planned merger between VEBA and VIAG is granted clearance under the merger control legislation and goes ahead, the parties undertake to divest all the shares they hold in VEAG and LAUBAG either themselves or through affiliates to one and the same acquirer (see point (a) below) within the time limit specified at point (b). At the same time as they divest their shares in LAUBAG, the parties will divest the lignite mining rights which either they or their affiliates hold either to LAUBAG direct or to the acquirer of the LAUBAG shares.

If LAUBAG and VEAG merge before the shares in LAUBAG are divested, VEBA/VIAG undertake to dispose of the resulting interests within the period specified at point (b) to the acquirer of the VEAG shares.

(a) The acquirer must be a viable existing or prospective competitor of VEBA, VIAG and RWE. It must be independent of and unconnected with the three groups. Its financing must be assured in the long term and it must have a track record which points to its being able to build up and develop the subject of divestment, VEAG and LAUBAG, if necessary in already merged form, into an active force rivalling VEBA and VIAG at all market stages. Any acquirer will have to have the Commission's express prior approval. If the acquirer is a consortium of several undertakings, each member of the consortium will have to be approved by the Commission in advance. In accordance with the provisions of VEAG's privatisation agreement, and in particular Article 5(1) thereof, up until 30 June 2013 any complete or partial resale of the parties' shares in VEAG by way of a singular or universal transfer to third parties will require the prior approval of the Treuhandanstalt or its successor, the Bundesanstalt für vereinigungsbedingte Sonderaufgaben.

(b) Should the shares in VEAG and LAUBAG not be sold within [...] of the merger being cleared, VEBA/VIAG will irrevocably transfer the power of disposal over the subject of divestment to a trustee (known as the divestment trustee) who will within a further [...] effect the sale for the account of VEBA/VIAG according to sound commercial principles [...]. The divestment trustee will be subject to the same obligations as VEBA/VIAG, especially when it comes to choosing the acquirer of the shares in VEAG and LAUBAG. He should be the same person as is appointed by RWE/VEW in accordance with the obligations imposed in the merger control proceedings before the Federal Cartel Office. He must be appointed within [...] of the VEBA/VIAG merger being cleared. The choice of divestment trustee and of his mandate will have to be approved in advance by the Commission. The divestment trustee will monitor compliance by VEBA/VIAG with their divestment obligations in relation to VEAG/LAUBAG as entered into vis-à-vis the Commission. He will report to the Commission [at regular intervals] about the progress being made with the sale, participate in the sales negociations and take a position on individual matters at the Commission's request. He will make suggestions to the parties to the sale as to how to speed up the process and will agree the list of potential acquirers in good time with the Commission.

The Commission may at any time during phase I ([...] from the date of clearance of the VEBA/VIAG merger) irrevocably transfer to the divestment trustee the power of disposal over the VEAG and LAUBAG shares which are to be divested if the divestment of these shares within a period of [...] is unlikely for reasons cited by the parties. The parties will be heard before any such decision is taken.

The parties may apply to the Commission for an extension of the divestment periods, subject to their furnishing proof [of exceptional circumstances beyond their control]. The Commission will then exercise its discretion in deciding whether or not to allow such an extension, the total divestment period being limited to [...]. Applications for an extension must be submitted not later than one month before expiry of the relevant period.

2. Within one month of their merger being cleared, VEBA/VIAG will renounce all rights arising under the Bayernwerk/PE/RWE consortium agreement of 22 August 1990.

3. VEBA/VIAG undertake to appoint, within [...] of their merger being cleared, in agreement with the Commission another trustee (known as the security trustee). Exercise of VEBA/VIAG's voting rights in VEAG and in LAUBAG will be transferred to this security trustee, whose terms of reference must also be agreed with the Commission. In exercising the voting rights transferred to him the security trustee will in principle be bound by his instructions. Where measures are involved, however, which would result in a substantial financial burden being placed on VEBA/VIAG, such as, for example, in the event of a capital increase, the trustee may exercise the voting rights only in agreement with VEBA/VIAG. Within [...] of clearance being granted, the members of the supervisory boards of VEAG and LAUBAG appointed by VEBA and VIAG will resign apart from one representative on each board. [...] Once the shares in VEAG and LAUBAG have been divested, the remaining supervisory board members will also resign. The new members of the supervisory boards of VEAG and LAUBAG will be appointed forthwith, VEBA/VIAG's rights of proposal and voting rights being exercised by the security trustee. The newly chosen supervisory board members may not also be members of the managing boards or employees of VEBA/VIAG or RWE or of any company affiliated therewith. Members of the managing boards of VEAG and LAUBAG may likewise not also be members of the managing boards or employees of VEBA/VIAG or of RWE or of any company affiliated therewith. An exception will be made in the case of the real property company BPR Energie Geschäftsbesorgung GmbH, Berlin.

4. Under a May 1999 loan agreement VEAG's shareholders placed financial resources at VEAG's disposal in order to guarantee its liquidity. VEAG's continued existence is therefore assured for the time being. VEBA/VIAG will give up their special termination rights under the abovementioned agreement. [...].

5. VEBA/VIAG declare that they are prepared to guarantee VEAG's electricity sales as follows.

(a) To the extent that the corresponding purchases are not already effected through their east German regional suppliers TEAG, e.dis and Avacon-Ost (formerly EVM), VEBA/VIAG will up until 31 December 2007 obtain either themselves or through third parties electricity from VEAG at the market price (see point (c) below). The guaranteed annual amount and its breakdown over the year will be determined by the purchases of the regional supply companies [...]. Up until 31 December 2003 the parties undertake to purchase 100 % of the reference quantity of the abovementioned regional suppliers [...]. In subsequent years, starting on 1 January 2004, the purchasing obligation will be reduced, irrespective of the rule at point (b), by 10 % a year compared with the initial quantity [...].

Quantities of electricity which VEAG supplies to the companies by way of balancing under the law on renewable energy sources will not count towards the sales volumes promised here.

(b) In the event an increase in sales by the abovementioned regional supply companies compared with sales in 1999, VEBA/VIAG will offer to procure [a larger part] of this additional quantity from VEAG. This additional take will also be subject to the abovementioned adjustment. This rule will apply only to increases in those areas in which the abovementioned east German regional supply companies currently operate their electricity networks.

In the event of a loss of sales by the abovementioned regional supply companies, the above obligation will not be reduced.

(c) Any shortfalls in the purchasing obligations will be added to the purchasing quota for the following quarter.

(d) The market price is defined as follows.

(i) For the year 2000 and up until 30 June 2001, an electricity price (energy cost and network cost component) of [corresponding roughly to the current market price] will be guaranteed. This electricity price will also apply for six months after the shares in VEAG have been transferred to a third party, that is to say for at least six months from the conclusion of the corresponding contract of acquisition, but at all events not beyond 31 December 2001. The network cost component may, however, not be counted twice by VEAG. The price of [corresponding roughly to the current market price] is accordingly to be adjusted by the network cost component where corresponding costs of VEAG's are already otherwise accounted for under Associations Agreement II for electricity sales in the areas covered by the east German regional supply companies.

From the time of VEAG's transfer to its new owner to the expiry of the purchase price rule [corresponding roughly to the current market price], the following will also apply.

In so far as a fall in sales by the abovementioned regional supply companies in those areas in which they currently operate their electricity networks to below the level of sales in 1999 is due to direct or indirect supplies by VEAG or by companies affiliated with VEAG, the price of [corresponding roughly to the current market price] will be adjusted for a corresponding quantity of electricity in accordance with the rule subsequently applicable (see point (ii)).

ii) After the initial phase (see point (i)) the following shall apply.

The electricity purchase price will be split into an energy component and a network cost component.

The charge for the network cost component will be determined by VEAG's published network use tariffs and will be collected in accordance with the principles of Associations Agreement II or any subsequent agreements and the applicable statutory provisions.

The charge for the energy component will be determined as follows.

For the period after the expiry of the price rule [corresponding roughly to the current market price] (see point (i)) the price of the energy component will be adjusted in line with the market price. [The market price will then apply]. This [market price] must be notified to VEAG during the following quarter. The reimbursement or additional payment resulting from the price adjustment will then be accounted for retrospectively. VEBA/VIAG will be required to have the notified price certified by an auditor.

VEBA/VIAG may depart from the above price adjustment rules if they reach a different agreement with the acquirer of the shares in VEAG or LAUBAG.

iii) The balancing and remuneration rights and obligations under the law on renewable energy sources and the law on cogeneration will remain unaffected throughout the purchasing period. In calculating the average price weighted according to the quantity concerned, offsetting supplies under the law on renewable energy sources do not have to be taken into account.

II. BEWAG

VIAG (BAG) holds 26 % of the capital and 28,7 % of the voting rights in BEWAG, and VEBA (PE) holds 23 % of the capital and 23,8 % (20 %) of the voting rights. Southern Energy Holding (SEI) holds 26 % of the capital and 28,7 % of the voting rights. The 20 % limitation of voting rights is based on the commitment given by PE in its letter of 17 September 1997 to the Federal Cartel Office. Ownership of the remaining capital (25 %) and voting rights (18,8 %) is widely dispersed.

1. If the planned VEBA/VIAG merger is granted clearance under the merger control legislation and goes ahead, VEBA/VIAG undertake, within the period referred to at point (b), to divest to a third party their shareholdings in BEWAG (see point (a) below).

(a) The acquirer must be an existing company independent of and unconnected with VEBA, VIAG and RWE and possessing the financial resources and proven expertise enabling it to maintain and develop BEWAG as an active force in competition with VEBA and VIAG. Any acquirer will have to have the Commission's express prior approval. If the acquirer is a consortium of several undertakings, each member of the consortium will have to be approved by the Commission in advance.

(b) If the divestment does not take place within [...] of their merger being cleared, VEBA/VIAG will irrevocably transfer the power of disposal over the subject of divestment to a trustee (known as the divestment trustee). The choice of divestment trustee and of his mandate will have to be approved in advance by the Commission. The divestment trustee will effect the sale for the account of VEBA/VIAG within [...] according to sound commercial principles [...].

2. VEBA/VIAG undertake to appoint, within [...] of their merger being cleared, in agreement with the Commission a trustee (known as the security trustee). Exercise of VEBA/VIAG's voting rights in BEWAG will be transferred to this security trustee, whose terms of reference must be agreed in advance by the Commission. Under the consortium agreement, this appointment is subject to SEI's consent. VEBA/VIAG will, moreover, empower the security trustee, subject to SEI's consent, to exercise their rights under the consortium agreement. In exercising the voting rights transferred to him the security trustee will in principle be bound by his instructions. Where measures are involved, however, which would result in a substantial financial burden being placed on VEBA/VIAG [...], the trustee may exercise the voting rights only in agreement with VEBA/VIAG. Such agreement must be given if it is essential to fulfilment of the commitment at section VIII.1 Within [...], the members of BEWAG's supervisory board appointed by VEBA and VIAG will resign apart from one representative. [...]. Once the shares in BEWAG have been divested, the remaining supervisory board member will also resign. The new supervisory board members will be appointed forthwith, VEBA/VIAG's rights of proposal and voting rights being exercised by the security trustee. The newly chosen supervisory board members may not also be members of the managing boards or employees of VEBA/VIAG or RWE or of any company affiliated therewith. Members of BEWAG's managing board may likewise not also be members of the managing boards or employees of VEBA/VIAG or of any company affiliated therewith.

3. The parties may apply to the Commission for an amendment of the commitment concerning divestment of the shares in BEWAG if they can prove that a divestment [is not possible despite their best efforts]. But even in this case the appointment of the new members of the supervisory board must proceed as indicated above and no member of BEWAG's managing board may also be a member of the managing board or an employee of VEBA/VIAG or of any company affiliated therewith.

III. VEW

VIAG currently holds (through BAG/IAW) 11,13 % of the shares in VEW and, through its subsidiary Contigas, 30 % of the shares in a ballast company, Energie-Verwaltungsgesellschaft (EVG), which in turn holds a further 24,7 % of the shares in VEW. Within EVG, reciprocal pre-emption rights have been agreed in favour of the shareholders or of VEW.

1. If the planned merger between VEBA and VIAG is granted clearance under the merger control legislation and goes ahead, the parties undertake to sell to a third party (see point (a) below) the abovementioned direct and indirect shareholdings in VEW within the time limit specified at point (b). If VEW merges with RWE before the expiry of the time limit specified at point (b), the parties undertake to dispose of the resulting shares within that period to an acquirer (see point (a) below).

(a) The acquirer must be an existing company independent of and unconnected with VEBA and VIAG. Any such acquirer will have to have the Commission's express prior approval. If VEW does not merge with RWE, the Commission will be particularly vigilant in ensuring that the company remains an active competitor.

(b) If a sale does not take place within [...] of their merger being cleared, VEBA/VIAG will irrevocably transfer the power of disposal over the subject of divestment to a trustee (known as the divestment trustee). The choice of divestment trustee and of his mandate will have to be approved in advance by the Commission. The divestment trustee will effect the sale for the account of VEBA/VIAG within [...] according to sound commercial principles [...].

2. If the divestment does not take place within [...] of their merger being cleared, VEBA/VIAG undertake to transfer the exercise of the voting rights conferred by the direct and indirect shareholdings in VEW to a trustee (known as the security trustee). The choice of security trustee and of his mandate will have to be approved by the Commission. In exercising the voting rights transferred to him the security trustee will in principle be bound by his instructions. Where measures are involved, however, which would result in a substantial financial burden being placed on VEBA/VIAG [...], the trustee may exercise the voting rights only in agreement with VEBA/VIAG. Such agreement must be given if it is essential to fulfilment of the commitment at section VIII.1. Within [...], the members of VEW's supervisory board appointed by VIAG will resign. New supervisory board members will be appointed forthwith, VEBA/VIAG's rights of proposal and voting rights being exercised by the security trustee. The newly chosen supervisory board members may not also be members of the managing boards or employees of VEBA/VIAG or of any company affiliated therewith. Members of VEW's managing board may likewise not also be members of the managing boards or employees of VEBA/VIAG or of any company affiliated therewith. This provision concerning the composition of VEW's supervisory and management boards will also apply to RWE if the merger of RWE and VEW is completed before the shares in VEW are divested.

IV. HEW

VEBA (or PreussenElektra/PE) holds 15,4 % of the shares and 14,2 % of the voting rights in HEW.

1. If the planned merger between VEBA and VIAG is granted clearance under the merger control legislation and goes ahead, VEBA/VIAG undertake to sell to a third party (see point (a) below) the abovementioned shareholding in HEW within the time limit specified below.

(a) The acquirer must be an existing company independent of and unconnected with VEBA, VIAG and RWE. Any such acquirer will have to have the Commission's express prior approval.

(b) If a sale does not take place within [...] of their merger being cleared, VEBA/VIAG will irrevocably transfer the power of disposal over the subject of divestment to a trustee (known as the divestment trustee). The choice of divestment trustee and of his mandate will have to be approved in advance by the Commission. The divestment trustee will effect the sale for the account of VEBA/VIAG within [...] according to sound commercial principles [...].

2. If the divestment does not take place within [...] of their merger being cleared, VEBA/VIAG undertake to transfer the exercise of the voting rights conferred by the direct shareholding in HEW to a trustee (known as the security trustee). The choice of security trustee and of his mandate will have to be approved by the Commission. VEBA/VIAG will, moreover, empower the security trustee, subject to the consent of HGV and Sydkraft, to exercise their rights under the consortium agreement. In exercising the voting rights transferred to him the security trustee will in principle be bound by his instructions. Where measures are involved, however, which would result in a substantial financial burden being placed on VEBA/VIAG [...], the trustee may exercise the voting rights only in agreement with VEBA/VIAG. Such agreement must be given if it is essential to fulfilment of the commitment at section VIII.1. Within [...], the member of HEW's supervisory board appointed by VEBA will resign. A new supervisory board member will be appointed forthwith, VEBA/VIAG's rights of proposal and voting rights being exercised by the security trustee. The newly chosen supervisory board member may not also be a member of the managing boards or an employee of VEBA/VIAG or RWE or of any company affiliated therewith. Members of HEW's managing board may likewise not also be members of the managing boards or employees of VEBA/VIAG or of any company affiliated therewith.

V. Rhenag

RWE Energie AG holds 54,1 % of the shares in Rhenag Rheinische Energie AG and VEBA AG (through Thüga AG) holds 41,3 %. RWE Energie AG and Thüga AG have concluded a consortium agreement in respect of their interests in Rhenag.

1. If the planned merger between VEBA and VIAG is granted clearance under the merger control legislation and goes ahead, VEBA/VIAG undertake to ensure that the existing corporate relationship between RWE Energie AG and Thüga AG, on the one hand, and Rhenag, on the other, is dissolved within [...] of the merger being cleared. One way of doing this would be for the shares held by RWE to be acquired by VEBA/VIAG or Thüga. In the event of a division of ownership, a time limit of [...] will apply. If it is done by selling the shares to a third party, the acquirer must be independent of and unconnected with VEBA and VIAG. Any such acquirer will have to have the Commission's express prior approval.

2. If the corporate relationship is not dissolved within [...] of the merger being cleared, the Commission may require VEBA/VIAG to transfer the exercise of the voting rights conferred by the shareholding in Rhenag to a trustee (known as the security trustee). The choice of security trustee and of his mandate will have to be approved by the Commission. Subject to the consent of RWE, VEBA/VIAG will also entrust to such trustee as may be appointed the task of exercising their rights under the consortium agreement. In exercising the voting rights transferred to him the security trustee will in principle be bound by his instructions. Where measures are involved, however, which would result in a substantial financial burden being placed on VEBA/VIAG [...], the trustee may exercise the voting rights only in agreement with VEBA/VIAG. Within [...] of the appointment of the security trustee, the members of Rhenag's supervisory board appointed by VEBA will resign. New supervisory board members will be appointed forthwith, VEBA/VIAG's rights of proposal and voting rights being exercised by the security trustee. The newly chosen supervisory board members may not also be members of the managing boards or employees of VEBA/VIAG or RWE or of any company affiliated therewith. Members of Rhenag's managing board may likewise not also be members of the managing boards or employees of VEBA/VIAG or of any company affiliated therewith.

VI. Associations Agreement II

1. VEBA/VIAG undertake to amend, within one month of their merger being cleared, their charges for network use in Germany in such a way that the price component for the national T-component, which is provided for by Associations Agreement II for crossing the interzonal boundary, comes to 0 Pf/kWh. They will publish this in an appropriate form within the abovementioned period. If, by the time the VEBA/VIAG merger is cleared, RWE/VEW have already notified their renunciation, VEBA/VIAG will immediately follow suit.

2. VEBA/VIAG undertake to indicate, within two months of their merger being cleared, to their special contract customers supplied in their own network area at 110 kV and above, the electricity prices broken down by network-use charge, energy price, metering/reading, etc. (Law on renewable energy sources, law on cogeneration, licensing agreements, turnover tax). For special contract customers supplied in their own network area at the medium voltage level (20 kV), this will apply as of 1 January 2001. The parties will publish this information in an appropriate form within the abovementioned two-month period.

With regard to customers supplied outside their network area, VEBA/VIAG will ensure that the relevant network operator furnishes the corresponding data to it in broken-down form so that they can be suitably broken down for these customers also.

3. With regard to the charges for supplying balancing energy, the parties undertake to amend, within one month of their merger being cleared, their prices in such a way that either the price per kilowatt is levied on a daily basis or only kilowatt-hour rates are charged. They will publish this information in an appropriate form within the abovementioned period.

VII. Germany/Denmark interconnector

VEBA (PE) currently holds on the overland route from Denmark to Germany, inter alia, a transport right amounting to 400 MW (allowing for losses) out of a total interconnector capacity of 1200 MW. Outsiders may be offered additional transmission capacity out of these 400 MW (over and above the capacities already sold by auction) only if the existing physical exchange of electricity from the electricity business Statkraft/PE is abandoned and replaced by an offsetting system.

If the planned merger between VEBA and VIAG is granted clearance under the merger control legislation and goes ahead, VEBA/VIAG undertake to conclude with Eltra and Statkraft an agreement whereby:

- Eltra may buy back the 400 MW transport right which currently serves to underpin the Statkraft/PE electricity supply agreement for the price previously paid by PE, less a certain amount for the use made of it in the meantime,

- the part of the 400 MW agreement signed with Statkraft is converted into a financial agreement without affecting its value,

so that third parties can use this capacity [in the near future]. If for reasons not attributable to VEBA/VIAG the agreement has not been concluded by [...], VEBA/VIAG may apply to the Commission for an extension of the time limit. The Commission will decide on the application to the extent that corresponding capacity is available [in the near future].

VIII. Common supplementary provisions

The following supplementary provisions will apply.

1. The parties undertake to safeguard the full economic value of the subject of divestment until the divestment is completed. In the case of VEAG, LAUBAG and BEWAG in particular, the parties will behave in such a way that the corporate assets are not reduced in value other than through the normal course of business. This relates in particular to maintenance of the fixed assets, know-how and technical and commercial competence of staff.

The security trustee will exercise the voting rights transferred to him in accordance with the above principles and ensure that the parties do not keep any confidential information obtained in the course of the market-related business activities of the undertakings in which shareholdings are to be divested, unless it is essential for purposes of fulfilling the present commitments, inter alia, when it comes to determining the undertaking's value and for the purchase price negotiations.

2. The Commission and VEBA/VIAG are agreed that the latter will have observed the time limits in relation to the divestment obligations if within the relevant time limit binding contracts concerning the subject of divestment have been concluded with the acquirer.

3. Unless provided otherwise in these commitments, they apply in full even where the operation concerned can be carried out only with the consent of third parties [...].

4. As regards the commitment to divest their shareholdings in VEAG and LAUBAG, the Commission and VEBA/VIAG are agreed that this commitment will be deemed to be fulfilled only if RWE/VEW have met an obligation imposed on them by the Federal Cartel Office in proceeding B 8 - 309/99 according to which they must divest the shares and voting rights they hold in VEAG and in LAUBAG and the lignite mining rights they hold in the new Länder, and if the Federal Cartel Office has imposed obligations to safeguard VEAG's sales and preserve that company's liquidity and these obligations have been met. As regards the commitments in relation to the Associations Agreement (see section VI.1 to 3), the Commission and VEBA/VIAG are agreed that these commitments will be deemed to be fulfilled only if the Federal Cartel Office has imposed corresponding obligations in proceeding B 8 - 309/99 and these obligations have been met.

5. The trustee's task will be completed when the divestment of the subject of divestment concerned has been implemented.

COMMITMENTS IN RESPECT OF CHEMICALS

I. Cyanuric chloride

If their planned merger is granted clearance under the merger control legislation and goes ahead, VEBA/VIAG undertake to divest the existing worldwide cyanuric chloride business of SKW Trostberg AG within [...] of the merger being cleared, as follows:

1. VEBA/VIAG undertake to offer for sale during a first phase [...] after clearance of the merger exclusively the subject of divestment defined below. They will submit to the Commission at least two weeks before the expiry of [...] a report on the steps taken to effect a sale and on the stage reached in or outcome of the sales negotiations.

The subject of divestment is a company to which will first have been transferred the hydrocyanic acid production plants and the cyanuric chloride production plants of SKW Trostberg, together with the necessary staff and all the technical know-how needed for the manufacture of hydrocyanic acid as well as all the commercial and technical know-how needed for the manufacture and sale of cyanuric chloride. The purchaser will procure the technical and auxiliary services (electricity, steam, water supply, sewage disposal, workshops, waste disposal) made available by a pool in the Münchsmünster industrial park on the same terms as the other pool members. VEBA/VIAG will require this purchaser to supply hydrocyanic acid to the purchaser of the sodium dicyanamide plant referred to at section II.1; if the sodium dicyanamide plant is not sold, this obligation will be agreed in favour of VEBA/VIAG.

2. If despite all the efforts made during the first phase, VEBA/VIAG do not succeed in finding a purchaser for the subject of divestment defined at section 1, they will with the Commission's agreement offer for sale during a second phase starting [...] after the merger is cleared and ending upon the expiry of a period of [...] after the merger is cleared exclusively both the subject of divestment defined at section 1 and the subject of divestment defined below.

The other subject of divestment is a company to which will first have been transferred the cyanuric chloride production plants, the necessary staff and all the commercial and technical know-how needed for the manufacture and sale of cyanuric chloride. VEBA/VIAG undertake to supply the company for a period of 15 years with hydrocyanic acid to the extent necessary to make full use of the available CC production capacity at a price corresponding to the annual weighted average of the prime costs of the existing [...] cyanuric chloride production plants of [...], plus [...]. The purchaser will be entitled to have the prime costs verified by an independent auditor, who will communicate to the purchaser and the seller the verified weighted annual average value of the prime costs while remaining bound by a duty of discretion vis-à-vis the purchaser as regards the cost components. If either the purchaser or the seller challenges this value, it will be established with binding force by an arbitrator should one of the parties submit, within three months of communication of the value by the auditor, to the president of the Cologne Chamber of Trade and Industry an application for the appointment of an arbitrator, notifying the other party of the application two weeks in advance. The arbitrator will decide on the value conclusively, there being no right of appeal from his decision. If no application is submitted within the abovementioned period, the value communicated by the arbitrator will be deemed to bind the parties. The supply obligation will cease to apply if hydrocyanic acid production has to be stopped by virtue of the law. It will also cease to apply at the earliest after expiry of a period of [...] if during [...] consecutive years the annual take of hydrocyanic acid by the purchaser falls below [...] tonnes a year and at the same time the rate of working of the hydrocyanic acid plant falls below [...] %. The purchaser will accept the obligation mentioned at section II.1 to supply the purchaser of the sodium dicyanamide plant with hydrocyanic acid. If the sodium dicyanamide plant is not sold, this obligation will apply in favour of VEBA/VIAG. The purchaser will procure the technical and auxiliary services (electricity, steam, water supply, sewage disposal, workshops, waste disposal) made available by a pool in the Münchsmünster industrial park on the same terms as the other pool members.

VEBA/VIAG will submit to the Commission no later than two weeks before the end of the second phase a report on the steps taken to effect a sale and on the stage reached in or outcome of the sales negotiations.

3. If, despite all their efforts, after the merger has been cleared VEBA/VIAG do not succeed in finding a purchaser for the subject of divestment defined at 1 or 2, the subject of divestment may with the Commission's agreement also be the cyanuric chloride business described below. The subject of divestment will consist of all the commercial know-how for cyanuric chloride, including all customer lists and orders on hand. VEBA/VIAG undertake to supply the purchaser on a commission order basis for a period of [...] years with up to [...] tonnes of cyanuric chloride a year at a price corresponding to the production costs plus [...]. The costs of the hydrocyanic acid needed for the production process will be fixed using the weighted annual average of the prime costs for hydrocyanic acid in the three existing production plants of [...]. The purchaser will be entitled to have the prime costs verified by an independent auditor, who will communicate to the purchaser and the seller the verified weighted annual average value of the prime costs while remaining bound by a duty of discretion vis-à-vis the purchaser as regards the cost components. The fifth sentence of point I. 2 will apply by analogy. The supply obligation will cease to apply if hydrocyanic acid production has to be stopped by virtue of the law. It will also cease to apply at the earliest after expiry of a period of [...] if the purchaser's CC take falls below [...] tonnes a year and at the same time the rate of working of the hydrocyanic acid plant falls below [...] %.

II. Sodium dicyanamide

If their planned merger is granted clearance under the merger control legislation and goes ahead, VEBA/VIAG undertake to divest the existing sodium dicyanamide business of SKW Trostberg AG within [...] of the merger being cleared, as follows.

1. VEBA/VIAG undertake to offer for sale during a first phase [...] after clearance of the merger exclusively the subject of divestment defined below. They will submit to the Commission at least two weeks before the expiry of [...] a report on the steps taken to effect a sale and on the stage reached in or outcome of the sales negotiations. The subject of divestment will consist of the sodium dicyanamide production plant and all the commercial and technical know-how needed for the manufacture and sale of sodium dicyanamide. If the hydrocyanic acid production plant has not been sold in accordance with section I, VEBA/VIAG undertake to supply the purchaser of the sodium dicyanamide plant for a period of [...] years until [...] with the hydrocyanic acid requirements (in the form needed for current sodium dicyanamide production) of the existing sodium dicyanamide production plant, at a price corresponding to the annual weighted average of the prime costs of the three existing [...] production plants of [...] plus [...]. The purchaser will be entitled to have the prime costs verified by an independent auditor, who will communicate to the purchaser and the seller the verified weighted annual average value of the prime costs while remaining bound by a duty of discretion vis-à-vis the purchaser as regards the cost components. The fifth sentence of point I. 2 will apply by analogy. The supply obligation will cease to apply if hydrocyanic acid production has to be stopped by virtue of the law. It will also cease to apply at the earliest after expiry of a period of [...] if the purchaser's annual hydrocyanic acid take falls below [...] % of the 1999 quantity and at the same time the rate of working of the hydrocyanic acid plant falls below [...] %. The purchaser will procure the technical and auxiliary services (electricity, steam, water supply, sewage disposal, workshops, waste disposal) made available by a pool in the Münchsmünster industrial park on the same terms as the other pool members.

2. If, despite all their efforts during the first phase VEBA/VIAG do not succeed in finding a purchaser for the subject of divestment defined at section 1, VEBA/VIAG will with the Commission's agreement offer for sale immediately thereafter the subject of divestment defined at section 1 and the subject of divestment defined below.

The other subject of divestment consists of all the commercial know-how for the sodium dicyanamide business, including all customer lists and orders on hand. SKW Trostberg undertakes to supply the purchaser on a commission order basis for a period of [...] years with up to [...] tonnes of sodium dicyanamide a year at a price corresponding to the production costs plus [...]. The costs of the hydrocyanic acid needed for the production process will be fixed using the weighted annual average of the prime costs for hydrocyanic acid in the [...] existing production plants of [...]. The purchaser will be entitled to have the prime costs verified by an independent auditor, who will communicate to the purchaser and the seller the verified weighted annual average value of the prime costs while remaining bound by a duty of discretion vis-à-vis the purchaser as regards the cost components. The fifth sentence of point I. 2 will apply by analogy. The supply obligation will cease to apply if hydrocyanic acid production or sodium dicyanamide production has to be stopped by virtue of the law or if the purchaser's sodium dicyanamide take falls below [...] tonnes a year.

3. The purchaser may also be a company set up with a view to a management buy-out.

III.

The subjects of divestment referred to at sections I and II may be acquired by one and the same purchaser.

IV.

1. VEBA/VIAG undertake to ensure that the subjects of divestment referred to at sections I and II are managed in the same way as before the merger. They also undertake to ensure that the corporate assets are not reduced in value prior to the sale other than through the normal course of business. This relates in particular to maintenance of the fixed assets, know-how and technical and commercial competence of staff. In agreement with the Commission VEBA/VIAG will appoint within [...] an independent trustee whose mandate will require the Commission's approval and who will monitor the fulfilment of the above obligations on the Commission's behalf. The trustee will ensure in particular that both the CC and the sodium dicyanamide businesses continue to be operated independently, exactly as before the merger but separately from the CC and sodium dicyanamide activities retained by VEBA/VIAG, and that they are not subject to any influence on the part of VEBA/VIAG. To this end the trustee will be invited to all general meetings and meetings of the supervisory and management boards of SKW Trostberg and its successors dealing with the CC and the sodium dicyanamide activities of SKW Trostberg. The trustee will report to the Commission at its request or where he considers it necessary about what he has observed and will suggest additional measures where appropriate.

2. If not all the commitments concerning CC and sodium dicyanamide have been fulfilled by then, VEBA/VIAG will appoint within [...] of the merger being cleared in agreement with the Commission an independent trustee whose mandate will require the Commission's approval. VEBA/VIAG will keep him informed about their attempts to effect a sale in accordance with sections I and II. The trustee will report to the Commission within [...] of the merger being cleared. He and the trustee appointed in accordance with section IV.1 may be one and the same person.

3. VEBA/VIAG will ensure that, if no sale of the subjects of divestment referred to at sections I and II has taken place within [...], the power of disposal over the remaining subjects of divestment will be transferred irrevocably to the trustee appointed in accordance with section IV.2, who will within [...] do his utmost to carry out the divestment on the owner's behalf according to sound commercial principles, autonomously and above all without being committed to any predetermined minimum price.

4. The choice of purchasers, who must be independent of and unconnected with VEBA/VIAG, will require the Commission's approval.

5. The Commission and VEBA/VIAG are agreed that VEBA/VIAG will have observed the time limits relating to the divestment obligations where binding contracts in respect of the subjects of divestment have been concluded within the time limits laid down with the acquirer concerned.

6. The trustee's task will be completed when the divestment of the subject of divestment concerned has been implemented.