Zapatero U-turn over Endesa has strings attached
28 July 2006,
28 July 2006
MADRID – The Spanish government is to let German energy giant EON take over Endesa provided it sells off 15 percent of the electricity firm.
Since February, the government has set itself against the EUR 29.1 billion bid, extending the powers of energy regulator CNE to block foreign bids against Spanish companies.
However, on Friday, the Spanish press reported that prime minister Jose Luis Rodriguez Zapatero had agreed to the deal, bowing to pressure from the European Commission which had threatened action against Spain for what it considered a breach of EU law.
At a press conference on Friday afternoon, the CNE said it had given the takeover bid the green light at a meeting the previous evening on the basis of certain conditions.
The conditions were immediately criticised by EON and the conservative opposition party (PP) in Spain.
The CNE is obliging EON to sell off 15 percent of Endesa’s world shares, which would amount to almost a third of its energy potential in Spain.
That could allow Gas Natural to obtain some of Endesa’s assets. The Catalan firm which launched an earlier bid for Endesa won the government’s approval for the bid.
In a statement, EON said it was still “totally committed to the takeover” and that it did not see any reason for the conditions being imposed. It said it would study the CNE decision in detail before informing the market of its next step.
Its Endesa takeover would “benefit all the interest groups, customers, employees, shareholders and the Spanish economy in general”, it said.
The PP said the conditions would force the EU to intervene. The government had “tried to politicise an operation which was always only and exclusively a business one”, said secretary general Angel Acebes.
It is understood that Zapatero and German premier Angela Merkel had come to a deal over the EON takeover, but it remains to be seen whether Merkel will consider the CNE conditions meet that agreement.
[Copyright EFE with Expatica]
Subject: Spanish news