By Chris Jones - 27th July 2006
Plans to create an EU-wide energy champion through the merger of Germany’s Eon with Spain’s Endesa could be stalled by the Spanish regulator.
The CNE has given the green light to the proposed takeover but with a number of significant conditions, which could force Eon to reconsider.
In particular, Eon would be forced to sell up to 40 per cent of Endesa’s global business, and agree to sell the Spanish company if it in turn is taken over by another firm.
Eon will also be obliged to sell Endesa’s stakes in six nuclear power plants to other Spanish operators, but rumours that the German group would be forced to sell its lucrative Ruhrgas unit proved unfounded.
The German group would retain control of Endesa’s subsidiaries in Latin America, Italy and France, but would be forced to keep the company as a separate unit and would not be allowed to sell it without permission from Madrid.
It would also have to pledge that Spanish gas supplies would not be reduced in order to increase supply to Germany.
But it remains unclear whether the conditions will be sufficiently tough to stop Eon from concluding the deal. Eon, Endesa and Gas Natural, a rival bidder for Endesa, could all appeal against the CNE ruling.
Madrid is opposed to the Eon takeover, preferring the deal with Gas Natural, and is rumoured to have put pressure on the CNE to block the merger.
The waters have also been further muddied by the European commission, which is concerned about the legality of the CNE, created by the Spanish government to assess foreign energy takeovers.
Brussels is considering legal action against Spain for breaking internal market rules – mergers between Spanish energy companies are not subject to the same scrutiny.
The CNE is nonetheless thought to have watered down its conditions following a ‘non-aggression’ pact agreed by Spanish prime minister José Luis Rodríguez Zapatero and German chancellor Angela Merkel, according to Spanish newspaper El Mundo.
Have your say...
Please enter your comments below.