Zapatero hints Endesa takeover to go ahead

11th January 2006, Comments 0 comments

11 January 2006, MADRID — Jose Luis Rodriguez Zapatero has hinted his government would back the takeover of Endesa by Gas Natural, Spain's largest gas company.

11 January 2006

MADRID — Jose Luis Rodriguez Zapatero has hinted his government would back the takeover of Endesa by  Gas Natural, Spain's largest gas company.

The prime minister said he would welcome the creation of a "strong energy company", reported the Spanish daily El Pais.

His comments go against the ruling of the Court for the Defence of Competition, which said earlier this month if the bid went ahead it would do "irreparable" damage to competition in the domestic energy market.
The government approval of the EUR 21.7 billion takeover of Spain's biggest power firm has been widely predicted.

Last month, the National Energy Commission backed the hostile takeover by Barcelona-based Gas Natural.

It said it would complete a number of conditions in its offer for the nation's biggest power company.

The regulator's non-binding recommendations to the government, which has the final decision, bring the gas provider a step closer to gaining 11 million domestic power customers.

It would help to compensate for a falling share of its domestic gas market.

The merged company would create a national company which the Spanish government has already said would allow the country to compete with major European rivals.

When it launched the bid in September, Gas Natural agreed to sell between EUR 7-9 billion of Endesa's assets to Endesa's closest competitor, Iberdrola, to help appease regulators.

Endesa chairman Manuel Pizarro has rejected the bid, saying it was not interesting to Endesa investors.

Gas Natural, headed by chairman Salvador Gabarro, has a market value about one-half that of Endesa.

It is the fourth time in five years that major Spanish power companies have tried to merge. Three previous transactions were blocked.

[Copyright EFE with Expatica]

Subject: Spanish news 


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