According to Tuesday's report in Finance, the sale has been approved by the supervisors of Elektro Primorska, and the contract is expected to be signed by the end of February.

Petrol responded with a posting on the website of the Ljubljana Stock Exchange saying it had been chosen as the most favourable bidder to buy E3 and was continuing talks on the company's acquisition.

Finance reported in its online edition that Petrol would pay roughly EUR 15 million for E3. The value of the deal is not known officially.

Elektro Primorska distributes electricity in south-western, western and north-western Slovenia, covering around 22% of the country's territory.

It had decided to sell the electricity retailer E3 because Elektro Primorska provides a public utility service and must not finance commercial activities, Finance explained.

The buyer of the subsidiary will have to meet certain conditions, including preserving the brand, the current number of employees and the seat in Nova Gorica, and further developing the company.

By selling E3, Elektro Primorska will get out of the electricity retail business, and meet one of the formal criteria for obtaining concession for a system operator for the distribution network in the region of Primorska.

In the past, the plan was to merge the energy distributor ECE and E3 under the wing of the state-owned power utility HSE, but it failed as the market regulator said this would violate market concentration rules.

Elektro Primorska continued with the procedure to offload E3, with Gen-I, Petrol and HSE submitting bids, and the fuel retailer being selected as the most favourable bidder.

E3 has a 11% market share in Slovenia, and an even higher, 15% share, in the sale of electricity to households. This makes it the fourth largest electricity retailer in the country.

According to Finance, the acquisition brings Petrol's share on the electricity retail market up to 20%, while its market share in the supply of households will reach almost 25%.