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6 December 2007
MADRID – The European Commission on Wednesday said it deemed a number of conditions imposed by Spain on Enel and Acciona’s takeover of Endesa broke European Union rules and asked for them to be removed.
The Spanish National Energy Commission (CNE) approved Italian power company Enel and Spanish conglomerate Acciona’s joint takeover offer of EUR 42.5 billion for Spain’s largest electricity supplier in July but imposed a number of provisos.
The Industry Ministry subsequently modified a number of these provisos in October following an appeal by the bidders. However, Brussels decided a number of conditions still breached European rules on the free movement of capital and goods, and the right of companies to establish themselves in any part of the bloc.
Brussels also argued Spain had breached EU merger regulations giving the Commission the exclusive right to rule on the antitrust implications of tie-ups with a European cross-border dimension.
The provisos Brussels objected to include the obligation to maintain Endesa as an independent company and keep its decision-making centre in Spain. The EC also wants a cap on Endesa’s debt service ratio removed.
Other offending conditions are restrictions on Endesa’s dividend policy, the obligation for some of its generation assets to purchase certain amounts of national coal and the obligation to keep the assets of the insular and non-mainland electricity systems within the Endesa group.
“The European Commission has decided that Spain has violated Article 21 of the EU merger regulation in that certain conditions imposed on Enel and Acciona for their acquisition of Endesa are incompatible with EC law and has requested their withdrawal by 10 January 2008,” the EU executive said in a statement.
This is the second time Brussels has taken Madrid to task over Endesa. In March, it took Spain to the European Court of Justice after the government refused to lift limits imposed on an earlier bid for Endesa by German power company E.ON.
E.ON dropped its offer for Endesa in April after Enel and Acciona acquired almost half of the company between them in the market. Enel and Acciona’s bid subsequently gave them control of 92 percent of the electricity company.
[Copyright EL PAÍS, SL. 2007]
Subject: Spanish news