By Chris Jones - 2nd April 2007
Eon’s bid for Spanish energy group Endesa, which sparked a major spat between EU and national regulators, has been scrapped in favour of an Italian-Spanish consortium.
The German power giant had to come through a number of skirmishes with the Spanish competition authorities before making a bid for Endesa, Spain’s largest electricity generator.
But in the end its offer was undermined by a rival bid from Italy’s Enel, whose decision to partner with a Spanish firm Acciona also earned it the backing of Madrid.
Enel and Acciona rapidly bought up a 46 per cent stake in Endesa, making Eon’s chances of a 100 per cent purchase all but impossible, and the German group finally conceded defeat on Monday.
In return for backing down, Eon will gain control of a number of businesses owned by Endesa or Enel, including significant market positions in Spain, Italy, France, Turkey and Poland.
Eon’s bid for Endesa was given the green light by the European commission as part of its programme of encouraging energy sector liberalisation.
But Madrid, fearful of a supposed threat to its energy supplies posed by the transfer of ownership to Germany, defied Brussels and imposed a number of conditions on the deal.
Spain was ultimately forced to back down, but made no secret of its continued opposition to the Eon bid, backing the rival offer from Enel/Acciona.
The Italian/Spanish consortium have pledged to keep the majority of Endesa’s business in Spain intact
Madrid still faces legal action at the European court of justice over its interference in the Eon bid.
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