NMa: Approves Takeover of Reliant by NUON Subject to Conditions

The Netherlands Competition Authority (NMa) today announced its intention to approve the takeover of Reliant Energy Europe B.V by N.V. Nuon after the parties had given guarantees that they would auction 900 MW of Nuon's production capacity in 10 MW lots. Nuon will tak eover approximately 3,500 MW from Reliant. At present Nuon has approximately 900 MW and will have a further 800 MW at its disposal in 2005 from the Intergen power station, which is still to be built. The total quantity of available production capacity in the Netherlands amounts to approximately 20,000 MW

In NMa's opinion, there was a threat that strong market positions would emerge in the area of the wholesale trade in electricity, due to the merger of the two electricity producers. The wholesale market for electricity has a number of special characteristics, such as the fact that electricity is a necessity of life, the fact that buyers cannot switch to a different product if prices are high and the lack of opportunities to store electricity. As a result of the proposed takeover, the opportunities open to large electricity producers to influence the market price through strategic behaviour during peaks would increase. As a result, it is expected that the concentration would lead to a considerable increase in prices on the wholesale market. By auctioning 900 MW of production capacity, this will no longer be the case. The auction will increase the liquidity of the market, it is transparent and it is also suitable for smaller buyers.

N.V. Nuon is active, for instance, in the area of the transmission, trade and supply of energy (electricity gas and heating) and in the area of electricity generation. Reliant Energy Europe B.V. is active in the area of the production, trade and supply of electricity.

Earlier this year, Nuon announced its intention to takeover Reliant. At the beginning of September 2003, NMa decided that a licence was required for the acquisition. Nuon and Reliant then applied for a licence.