EU clears Spanish energy merger

Brussels has given a green light to German Eon’s takeover bid for Spanish Endesa – an energy merger opposed by Madrid.

European commission approval under the EU’s merger regulation is to herald further action against Spanish legislation blocking Eon/Endesa takeover.

The case has become a showcase example of EU fears over rising economic protectionism and a major issue in attempts to free-up Europe’s energy sector.

“After examining the operation, the commission concluded that the proposed transaction would not significantly impede effective competition… and has therefore approved the concentration,” said a statement on Tuesday.

“It is considered unlikely that the proposed operation would have a significant adverse impact on competition in the energy markets in France, Italy, Germany, Poland and Spain in particular, or in the European Economic Area as a whole.”

Competition commissioner Neelie Kroes also warned both Madrid and Berlin that she would investigate monopoly allegations arising from the Eon/Endesa case

“In the course of the market investigation, third parties voiced concerns about the malfunctioning of the German and Spanish gas and electricity markets.”

“The commission takes these allegations very seriously,” said the commission statement.

A move by Madrid to block the Eon bid with a decree giving the Spanish energy regulator more power to block takeovers by foreign companies is next in the firing line.

Kroes has the authority to declare the new legislation illegal and a Brussels infringement procedure against Spain is expected on May 3.

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