Madrid's rules on energy giant takeover 'illegal'
29 November 2006, BRUSSELS — The European Commission said on Wednesday conditions set by Madrid for the Germany energy giant E.ON's bid for Spanish utility Endesa were illegal.
29 November 2006
BRUSSELS — The European Commission said on Wednesday conditions set by Madrid for the Germany energy giant E.ON's bid for Spanish utility Endesa were illegal.
The EU Commission said the conditions imposed on E.ON for the takeover "raise serious doubts as to their compatibility with EC law."
Brussels set conditions set by Madrid earlier this month, broke rules free movement of capital, freedom of establishment and the free movement of goods.
These were basic to EU laws on free trade in the community.
The latest ruling comes after the Spanish industry ministry scrapped most of its original conditions attached to E.ON's EUR 37 billion bid in an effort to avoid the threat of legal action from the European Commission.
But Madrid kept two conditions, which meant E.ON would have to sell Endesa in case another company acquires a controlling stake in E.On and a mandatory committment for the German company to abide by Endesa's current investment plans.
The Commission gave the Spanish authorities until 13 December to reply.
It is another twist in a 14-month battle for control of Endesa.
[Copyright EFE with Expatica]
Subject: Spanish news