Romanian commission to screen takeover of E.ON subsidiary by Hungary's MVM amid alleged security risks

The Romanian Ministry of Energy announced that it notified the Foreign Direct Investment Review Commission (CEISD) regarding the transaction through which Hungary's state-owned energy group MVM intends to acquire the gas and electricity supply division of E.ON Energie Romania, citing "extensive business relations with" with Russian companies.

The shares of E.ON may end up in the hands of entities out of the European Union, the Romanian officials reasoned.

"Following a rigorous analysis, the Ministry of Energy has identified multiple topics for in-depth analysis regarding the impact of the possible transaction on Romania's national security," the ministry said.

MVM has extensive business relations with Gazprom and Rosatom, Russian companies under international sanctions, through which Hungary maintains a high dependence on Russian natural gas and nuclear technology, according to the Executive's press release.

Elements of "decisive influence, shadow control, influence by economic dependence and effective control" were identified, both within the MVM group and the company through which the majority stake in E.ON Energie România is intended to be purchased, the Romanian officials further pointed out.

"From the analysis of the documentation submitted by MVM, it results that the contractual structure and the clauses related to the transaction generate a possibility of subsequent transfer of the shares purchased from E.ON Energie Romania to entities outside the European Union or to other entities that do not appear as initial parties to the transaction.

This contractual vulnerability may facilitate the indirect transfer of control to economic or political actors that do not comply with the rigors and standards of compliance imposed by European legislation in the field of energy and transparency of transactions," argued the Romanian officials.

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