The Danish Competition Authority (DCA) recently approved a merger between Denmark’s two largest electricity companies?Elsam and NESA. This article focuses on some topics of general interest that this merger raises. One such issue is that the merger happened in a market where the product characteristics and the capacity constraints give a dominant producer the opportunity to make use of its position to increase both prices and profits. The merger also illustrates some difficulties in calculating the effect on competition when a merger makes the merged entity a minority owner of an important competitor. Furthermore, a longer time horizon than usual was used for the investigation of the competition effects of the merger.
World Competition