EC clears Endesa takeover offer by Enel-Acciona combine

06 July 2007

The European Commission (EC) yesterday announced having approved the €42.5-billion ($57.8 billion / Rs244,077.5 crore) joint offer for Spanish power utility Endesa SA by Italian utility Enel SpA and Spanish infrastructure group Acciona SA.

Though the EC has approved the takeover that the companies announced on 26 March, 2007, it said that Acciona''s parallel plans to acquire sole control over Endesa''s renewable energy business falls outside the scope of merger regulation, and would therefore come under the scrutiny of the national competition authorities.

Enel and Acciona had joined up at the last minute this April to save Endesa from a politically unpopular takeover from Germany''s E.ON AG. (See: E.ON ups bid for Endesa to $53 billion)

The commission also said that it would review the clearance of the deal by CNE, the Spanish energy regulator, announced on Wednesday, which had approved the acquirers'' offer but had attached 12 conditions on the grounds of safeguarding Endesa''s independence and preventing the Italian government, which has a 32-per cent stake in Enel, from influencing Spanish energy policies through this stake.

Jonathon Todd, EC spokesman for the EC, said, "We will verify whether the restrictions imposed violate article 21 of the merger regulation, which gives the Commission executive competence to scrutinise mergers of a (pan-EU) dimension, and which prohibit member states from imposing conditions which may be in violation of treaty rules on free movement of capital."

The two firms will pay €40.16 per Endesa share with Acciona eventually coming to own almost a quarter of the group with Enel holding the remaining stake.