EU backs E.On to buy power assets
6 August 2007, BRUSSELS - E.On AG won EU approval on Monday to buy Spanish power utility Viesgo from Enel SpA, acquiring additional generation capacity from Endesa SA to make it the fourth-largest player on the Spanish power market.
6 August 2007
BRUSSELS - E.On AG won EU approval on Monday to buy Spanish power utility Viesgo from Enel SpA, acquiring additional generation capacity from Endesa SA to make it the fourth-largest player on the Spanish power market.
The German gas and electricity company is paying cash for power generation assets in Spain, Italy, France and elsewhere that it values at EUR 10 billion, a deal that comes after Spanish government opposition derailed a bigger bid for Endesa itself.
The European Commission said it did not see antitrust problems with E.On's purchase of Viesgo because it would give it only a limited share of the Spanish market, facing other significant players such as Endesa and Iberdrola.
Indeed, by buying power capacity from Endesa, the deal would ease one market problem the Commission sees, "the current level of concentration" that makes Endesa and Iberdrola the two dominant players.
In Spain, E.On will now be able to draw more than 450 megawatts of nuclear-generated electricity under a 10-year supply agreement, three power plants that can generate 1,475 megawatts in total and a combined cycle gas turbine plant under development that will bring another 800 megawatts.
E.On withdrew its earlier politically sensitive offer for Endesa this spring, allowing Enel and Acciona SA to step in with a EUR 43.7 billion bid and cooling a long dispute between the EU and Madrid over Spain's efforts to keep national prizes out of foreign hands.
Endesa's share price has doubled since September 2005, when Spain's Gas Natural launched a hostile bid, later challenged by E.On, that triggered the takeover battle. The Spanish government had initially favored the Gas Natural deal that would have created a major Spanish energy player.
(Copyright AP with Expatica)
Subject: Spanish News