EC acts to sanction Spain for blocking Endesa takeover
24 February 2006, MADRID — The European Commission is preparing to refer Spain to the European Court of Justice for failing to scrap a law that could be invoked to block a major energy merger.
24 February 2006
MADRID — The European Commission is preparing to refer Spain to the European Court of Justice for failing to scrap a law that could be invoked to block a major energy merger.
The commission has long contested a 1999 Spanish law which gives authorities the right to block companies in which a public body has an interest from taking a stake of over 3 percent in a Spanish energy company.
The move came as the Spanish government was planning to approve measures to block a foreign takeover for its electricity giant Endesa.
The business daily Cinco Dias reported Madrid will try to introduce measures to prevent the takeover bid launched by German company E.On AG (EON) for Endesa, citing sources close to Socialist administration..
The expected measures, to be approved by the council of ministers on Friday, include reinforcing a law limiting voting rights to 3 percent for foreign groups buying stakes in Spanish energy companies.
Another option is to extend that limitation to those companies in which a foreign government has a golden share - as is E.On's case, the newspaper adds.
Golden shares offer governments the right to veto takeover attempts in strategic industries.
Another possible means of defence is a Spanish hydrocarbon law that could allow energy market regulator CNE to veto operations that could jeopardize investments in the country's energy distribution network, the paper claims.
Spain has been warned by Brussels against protectionism in the the case of Endesa.
The electricity company was facing a takeover from the Spanish energy company Gas Natural – a move which Madrid backed.
The Spanish daily El Mundo also reported the economy minister Pedro Solbes had warned José Luis Rodríguez Zapatero against bringing in protectionist measures.
[Copyright EFE with Expatica]
Subject: Spanish news