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Spanish energy group Iberdrola to merge with Union Fenosa: report
AFP
MADRID
Petroleumworld.com 09 27 06
Iberdrola, the second-biggest electricity producer in Spain and a leading renewable energy company, is to merge with the Union Fenosa, the third-biggest energy group in Spain, Spanish newspaper El Economista reported on Tuesday.
El Economista cited "extremely reliable sources" as saying that the merger was sealed earlier Tuesday after talks between the chairmen of Iberdrola and Spanish construction group ACS, which controls Union Fenosa.
The merged group combining Iberdrola and Union Fenosa would have a market capitalisation of 42.4 billion euros (53.8 billion dollars), the report said.
ACS controls Union Fenosa through its 35-percent stake in the company.
El Economista said that ACS and Iberdrola "are preparing the last details for a merger" and that ACS had bought a 10-percent stake in Iberdrola on Tuesday.
Union Fenosa declined to comment and a report on the website of leading Spanish daily Expansion contradicted the El Economista story.
Sources familiar with the situation told Expansion that ACS had bought a 10-percent stake in Iberdrola but was not planning an immediate merger between Iberdrola and Union Fenosa.
The paper said that ACS had paid 37 euros per Iberdrola share, valuing its 10-percent stake at about 3.3 billion euros.
The move by ACS to buy 10 percent of Iberdrola heats up the battle for control of the Spanish energy sector.
On Monday, Spanish public works group Acciona said it had bought 10 percent of Spain's largest electricity company, Endesa, for an estimated 3.38 billion euros.
Endesa is already subject to hostile takeover bids from Spanish gas group Gas Natural and Germany energy giant E.ON.
The Spanish government has expressed its desire for a Spanish energy champion, which a merger of Iberdrola and Union Fenosa would provide, and has been criticised for attempting to block the takeover of Endesa by E.ON.
The European Commission ruled Tuesday that Spain had breached EU regulations in trying to protect Endesa.
The commission, the EU's top competition regulator, said that Madrid had breached competition rules and internal market regulations after the national energy regulator CNE placed conditions on the German bid.
AFP 26 1843 GMT 09 06
Copyright ©2006 AFP. All Rights Reserved.
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