Final Word from Wednesday, June 22, 2011

Before ČEZ could complete its drive for a vertical monopoly, a few grains of sand gotcaught in the gears. 1) The EU launched an antitrust probe and is now rumored tobe on the verge of announcing a formal investigation with a max. possible fine of Kč200bn. 2) The Czech antitrust office started its own review of the energy market. 3)The Czech probe was spurred on by a Power Abuse report from Candole Partnersthat gives a compelling argument for why ČEZ's relevant market is the CR and notEurope and for how ČEZ has been expanding its margins at the expense of coal suppliersand consumers. 4) ČEZ's complicated asset swap with EPH started unraveling.5) Fukushima threw Temelín into doubt, and ČEZ hired McKinsey to draw up a contingencyplan in case the tender fails. 6) ČEZ's top managers showed great foresightby dumping their options before most of the above became apparent to outsiders.

Glossary of difficult words

stillborn - (of a plan or proposal) having failed to develop or succeed;

vertical monopoly - a monopoly created through the integration of companies in the supply chain (such as coal production, power production and power distribution);

sand in the gears - unexpected problems that arise;

to spur on - to give encouragement to something;

compelling - inspiring conviction; not able to be refuted;

to unravel - to undo or to become undone;

contingency - a future event or circumstance that is possible but that cannot be predicted with certainty.


Tel: 420 224 221 580

Published by

E.S. Best s.r.o.
Ovenecká 78/33
170 00 Prague 7
Czech Republic



FS Final Word