Eon's shock offer yesterday to sell its prized electricity transmission grid could have a domino effect on the European Union's energy sector. The German company struck a deal with EU competition regulators to divest the asset to settle two antitrust cases against it, an important breakthrough in Brussels' efforts to prise open electricity and gas markets. Paris and Berlin have campaigned hard against Brussels to try to block draft European law that could split integrated electricity and gas companies such as Eon and RWE of Germany and EdF of France. EdF is Europe's biggest power company by market capitalisation, with Eon number two. Intriguingly news of Eon's deal emerged as national energy ministers gathered yesterday in Brussels to discuss the contested plans. The European Commission wants to force companies to separate the ownership of their gas and electricity transmission networks from their generation and supply businesses, a process known as unbundling. The wrangling continued at yesterday's ministerial meeting, which failed to produce a conclusive result. There were hopes that a deal could be reached by June. But as the Commission was failing to make progress with its legislative programme, it had a telling result from its antitrust action. Eon's decision represents a big victory for Neelie Kroes, the EU competition commissioner. Usually she can fine groups up to 10 per cent of their global annual turnover if there are formal rulings against them. But she has often threatened to use her antitrust powers to force energy groups to split their network businesses from other operations such as supplying and selling electricity and gas. She believes some "integrated" companies have abused their grip on pipelines, grids and other infrastructure to freeze out potential competitors. In the event, the agreement reached between Brussels and Eon - which also involves the company divesting 4,800MW of generation capacity to competitors - meant Ms Kroes did not need to use her full powers to enforce a break-up. But it could alarm executives at other top European energy groups that have been on the back foot since Ms Kroes held an antitrust review in 2006 that found severe market distortions and a lack of competition. Matthew Levitt, of law firm Lovells, said: "The deal with Eon, Germany's flagship energy company, clearly creates a precedent. In market terms it will invigorate competition and it could make the position of other companies under investigation for similar conduct harder to defend." Ms Kroes is investigating antitrust cases against EdF and Belgium's Electrabel, among others. Copyright The Financial Times Limited 2008