State-owned Hungarian energy company MVM allegedly shook hands with the German E.ON group to buy its Romanian subsidiary, E.ON Energie. The subsidiary is the second biggest on the market with a 41% market share, but the Romanian government is concerned about the transaction due to the Orbán cabinet’s strong Russian ties. Will the Talgo case happen again?
State-owned Hungarian energy company buying Romanian top energy company
According to sources sharing information about the planned acquisition with Hotnews.ro, the state-owned Hungarian energy company MVM would buy E.ON Energie. They will sign the documents only after the Romanian elections. The first round of the presidential elections will be on 24 November. The second round has been set to take place on 8 December. On 1 December, Romanian citizens will cast their ballots in the parliamentary elections. However, German E.ON and Hungarian MVM would only like to announce the transaction after the presidential and parliamentary elections.
Sources talking to Hotnews about the large-scale acquisition said the Hungarian company wanted to obtain E.ON Energie’s provision business and planned to buy the distribution activities. Before, E.ON conducted talks with other companies like Romgaz and OMV Petrom about the transaction. Allegedly, they shook hands with the Hungarian energy company.
Romanian press wrote that the Ciolacu cabinet is concerned about the developments. Sources said the prime minister’s office would create a committee to examine the arrangement. Romanian top officials are worried due to the Hungarian government’s Russian ties. Since MVM is state-owned, they suspect risks since they believe there is a chance that millions of Romanian customers may get under the influence of the Hungarian government having good ties with Putin’s Russia, portfolio.hu wrote in their summary.
Will the Talgo case happen again?
We wrote HERE that Hungary’s Ganz-MaVag consortium made a generous offer to acquire 100% of the shares of the Spanish train manufacturer Talgo. However, from the start, the Spanish government opposed the deal, citing Hungarian Prime Minister Viktor Orbán’s pro-Russian policies. Eventually, Spain successfully prevented the transaction, leaving Hungary reliant on outdated, 20–30-year-old Western European train carriages.
E.ON Energia provides gas for 3.4 million customers in Romania. It is the second largest market player with a 41% market share after Engie. In addition, they have an approximately 5% market share in the electricity sector.
Loss-making company in Hungarian ownership
E.ON noted that they would like to sell their subsidiary because of the uncertainties of the Romanian market, posing significant risks and instabilities. The reason is the Romanian government’s frequently changing energy price caps and compensation rules. Romania privatised E.ON Energie in 2004, selling it to E.ON Ruhrgas for EUR 300 million. Currently, 68.18% of the shares are owned by E.ON Romania. The Energy Ministry of Romania had 31.82%.
Currently, the possible transaction concerns only the provision business. In 2022, E.ON Energie had a EUR 2.75 billion income but generated an almost EUR 72 million loss.
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I have not bothered to read the article, but, what right does the government of Hungary have to own a Romanian energy company?
Regardless of the fact that it is via a state owned company!
What about Romanian Energy Sovereignty?
The Hungarian government are hypocrites.