Azeri state energy company SOCAR said it expected to close a deal to purchase Greek natural gas grid operator DESFA in early 2015, anticipating that it will clear an investigation by the European Commission.
SOCAR was the only bidder in a tender for DESFA last year, offering 400 million euros ($501 million) for a 66 percent stake.
The European Commission said on Wednesday it had started an in-depth investigation to assess whether the proposed acquisition would be in line with EU merger regulations.
“SOCAR appreciates the time, efforts and resources of the European Commission’s antimonopoly services for an in-depth investigation of the deal and is ready to cooperate with them in a constructive manner,» SOCAR said in a statement on Thursday.
EU officials said they had concerns that the planned deal might reduce competition in the wholesale gas market if the merged entity were to hinder access by SOCAR’s rivals to supply the Greek gas transmission network.
“The Commission aims to ensure that the sale of DESFA, part of the Greek government privatisation programme with a view to modernise and liberalise the energy markets, does not result in competitive harm and ultimately higher gas prices for consumers in Greece,» the European Commission said in a statement.
The Commission has 90 working days, until 23 March 2015, to take a decision.
Russian energy company Sintez and Greek-Czech group PPF-Terna dropped out of the race for DESFA last year, leaving SOCAR as the only major player in the running.
The Azeri state energy company expects the purchase of DESFA to strengthen its export potential.
SOCAR wants to deliver gas from its offshore Shah Deniz gasfield to increase the level of its gas distribution in Greece from its present level of 17 percent. [Reuters]