Takeover of energy companies – what do you need to know?

However, acquiring an energy company is a far more complex process than in other sectors – due to numerous regulatory requirements, the presence of critical infrastructure, and the involvement of government bodies.

Acquiring an energy company – what does this mean in practice?

An energy company takeover is most commonly understood as the acquisition of control over an entity engaged in regulated activities, such as the generation, distribution, transmission or trading of electricity, gas or heat. Such a takeover may take the form of:

• A share deal – the acquisition of a company’s shares.
• An asset deal – the acquisition of specific assets, e.g. a wind farm or a transmission network.
• A merger of companies under the provisions of the Commercial Companies Code (KSH).

The process itself must be synchronised not only with the Commercial Companies Code but also with energy law, competition law and regulations concerning foreign direct investment (FDI) controls – in the case of enterprises deemed strategic.

Licences and permits

Energy companies carry out licensed activities.

• Acquisition of control – whether through a share deal or a merger by acquisition – requires notification to the President of the Energy Regulatory Office (URE) and obtaining an amendment to the licence decision or the issuance of a new energy licence (if the existing scope of the acquiring company’s activities so requires).
• In the case of an asset deal, the purchaser must obtain a new licence.

In every case, the President of the Energy Regulatory Office verifies whether the acquiring entity meets all the required criteria: technical and financial capacity, no tax or customs arrears, and a guarantee of continuity of supply. Failure to comply with the requirements regarding notification to the Energy Regulatory Office may lead to serious sanctions, including the loss of the licence and the right to continue operating in the energy sector.

Regulatory approvals and state supervision

• Merger control – the acquisition of an energy company requires notification to the President of the Office of Competition and Consumer Protection (UOKiK) (where turnover thresholds are met) or to the European Commission (in the case of larger cross-border transactions).
• Foreign direct investment (FDI) control – certain energy companies are classified as ‘strategic entities’. The acquisition of shares or a merger involving an investor from outside the European Economic Area (EEA) requires prior approval from the FDI authority, even if the transaction is carried out as a merger under the Commercial Companies Code.
• Unbundling restrictions – energy law and EU directives impose an obligation to separate network activities (transmission, distribution) from generation and trading activities. The acquisition of a company must not lead to a breach of these rules – the structure of the transaction must be analysed in this regard on a case-by-case basis.

Other obligations include: updates to registers, notifications to system operators, e.g. under PPAs or capacity contracts, and environmental notifications – the acquisition of a company owning installations covered by integrated permits, ETS or environmental decisions requires notification to the relevant authorities.

Risks associated with the acquisition

• Risk of losing licences or financial support – proper planning and synchronisation of the approval and notification process is crucial.
• Intervention by state authorities (FDI, UOKiK, URE) – pre-screening of the transaction and obtaining letters of intent for approvals, where possible, is essential.
• Unbundling issues – every transaction should be preceded by an analysis of its impact on the ownership structure and operations of the group.
• Regulatory changes – the energy sector is subject to frequent legislative amendments, which requires constant monitoring.

The acquisition of an energy company is a complex, multi-stage process requiring not only an excellent knowledge of company law, but above all an understanding of the specific nature of the energy market and the regulatory environment. Key to the success of the transaction is the early identification of necessary approvals and notifications, the selection of the appropriate acquisition method, and the precise synchronisation of corporate and administrative procedures. Only a comprehensive approach ensures legal certainty and the continuity of energy operations following the completion of the transaction.

Author

Zuzanna Bokina-Kielbasa

Radca prawny, Managing Associate

Specializes in corporate services for business entities and personal data protection. Assists the firm's clients in the preparation of all corporate documentation, including the registration of commercial companies and the further registration of changes, and provides ongoing and comprehensive advice on business. Provides advice in carrying out transformation processes of commercial companies, including transformations and mergers. Prepares and gives opinions on contracts, regulations and current documentation…

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