EC, Spain on collision course over Endesa offer provisos

8 January 2008

MADRID – Spain and the European Commission look set for another face-off in the European Court of Justice over the takeover of Spanish electricity supplier Endesa.

Brussels has given Madrid until 10 January to remove conditions imposed on Italian power company Enel and Spanish conglomerate Acciona’s successful takeover of Endesa or face the prospect of legal action for allegedly breaking European Treaty rules. However, the Industry Ministry is digging in its heels and may ignore the ultimatum.

A spokesperson for the European Competition, Neelie Kroes, said yesterday Kroes’ department would have no alternative but to take further legal action against Spain if it refuses to budge on the issue.

Brussels has already initiated proceedings against Spain in the Luxembourg-based Court of Justice over a decree in February 2005 granting the Spanish National Energy Commission (CNE) additional powers to vet an earlier takeover bid for Endesa by Germany’s E.ON. Brussels also objected to a number of the provisos attached to the approval of E.ON’s offer by the CNE.

The Industry Ministry modified several conditions imposed by the CNE in approving Enel and Acciona’s offer of EUR 42.5 billion for Endesa. However, Brussels decided a number of provisos still breached European rules on issues such as the free movement of capital and goods. Brussels also argued that Spain had breached regulations giving the Commission the exclusive right to rule on the antitrust implications of European cross-border tie-ups.

E.ON dropped its offer for Endesa after Enel and Acciona acquired almost half of the company between them in the market. Enel and Acciona’s bid gave them control of 92 percent of the electricity company.

Subject: Spanish news