Brussels in legal action against Madrid over E.ON
28 March 2007 , BRUSSELS - The European Commission said on Wednesday it was taking legal action against Spain for interfering in German energy giant E.On's bid for Spanish utility Endesa.
28 March 2007
BRUSSELS - The European Commission said on Wednesday it was taking legal action against Spain for interfering in German energy giant E.On's bid for Spanish utility Endesa.
The Commission said it was referring Spain to the European Court of Justice for imposing "unlawful" conditions on the EUR 42.3 billion bid, the BBC reported.
E.On has stalked Endesa for six months and raised its offer on Monday.
If successful in its bid, it would create one of the largest energy firms in Europe.
However, Spanish construction firm Acciona and Italian utility Enel have built up significant holdings in Endesa over the last six months, and now control 46 percent of the business between them.
The long-running battle for control of Endesa has fuelled accusations of favouritism by the Spanish authorities, with critics saying Madrid has tried to keep the firm out of foreign hands.
E.On claims Acciona and Enel have misled investors over their plans.
EU regulators had complained about conditions the Spanish government imposed on E.On's bid to buy Spanish electricity firm Endesa, saying they violated European competition rules.
Earlier this month, the European Commission said it had received a reply from Spain.
However, it now appears Brussels has decided that Madrid's reply does not satisfy its concerns.
The Spanish government insists that E.On must keep the Endesa brand for at least five years and use only Spanish coal in power stations. It also stipulates that certain assets cannot be sold off.
"Since the Spanish government has still not withdrawn the illegal measures... the Commission has decided to refer the case" to the EU court, a Commission statement said.
Subject: Spanish news