The EU has threatened to overturn Spanish restrictions on a takeover bid by Eon of Germany for Endesa, Spain's largest power company.
On Friday the European commission gave an official warning that Madrid exceeded its authority in blocking Eon from buying all of Endesa.
“The commission has informed Spain formally that it has come to the preliminary conclusion that Spain has violated EU merger laws,” a commission spokesman told reporters.
In its preliminary view, the commission said the conditions breach rules on the free movement of capital and the freedom of establishment, as they are not necessary nor proportionate on grounds of public security.
Brussels’ battle with Madrid is part of an EU campaign to open energy markets to competition and knock down barriers to takeovers.
Rejecting the Spanish limits would help Eon, Germany’s largest utility, complete its 26.9 billion-euro ($34 million) takeover offer for Endesa.
Spain has until September 4 to respond to the EU executive's decision.
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