CEZ to merge with eight regional distribution companies

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The Czech government approved a new plan on Monday to restructure the Czech energy sector.

The Czech government approved a new plan on Monday to restructure the Czech energy sector. Industry and Trade Minister Miroslav Gregr announced that the state-owned energy utility CEZ is to acquire the government's majority stakes in six of the eight regional electricity distribution companies and minority stakes in the other two. The Czech National Property Fund will in exchange acquire a majority in the power transmission system.

The Czech government tried unsuccessfully to privatise CEZ and the regional distribution companies in one package, but was forced to delay the privatisation after bids from foreign investors fell short of the asking price.

The latest move will further strengthen the position of the already dominant CEZ, now that the Czech electricity market is being liberalised. Some experts warn that CEZ might try to misuse its control over the distribution companies to prevent competitors from reaching end-users.