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EU launches second lawsuit against Spain over Endesa takeover
AFP
BRUSSELS
Petroleumworld.com 03 29 07
The European Commission decided Wednesday to launch a second lawsuit against Spain for blocking a bid by German energy group E.ON for Spanish firm Endesa in a growing standoff between Brussels and Madrid.
"The European Commission has decided to refer Spain to the European Court of Justice for failure to comply with the Commission's decisions requiring Spain to withdraw certain conditions concerning E.ON's bid for Endesa," it said in a statement.
Spain has defied repeated requests by the European Union's executive arm for it to lift conditions it has imposed on E.ON's takeover bid for electricity group Endesa.
The Spanish energy regulator CNE has set a number of requirements for E.ON, including that it must conserve for five years the Endesa brand name of the biggest Spanish electricity generator.
Other requirements stipulate that Spanish coal must be used in power stations and that certain assets can not be sold off.
Madrid, which had favoured a takeover bid for Endesa from Spanish rival Gas Natural, believes the conditions are vital for national energy security.
In Madrid Spanish Economy Minister Pedro Solbes said Wednesday it would be helpful if the European Court issued a ruling on the Endesa takeover.
"It wouldn't be bad for the court to get involved," he told an economic forum, arguing that European Union member states need to know the extent of their "margin of manoeuvre" with regard to decisions by the European Commission.
"The Commission says no and we say yes. The court will issue a ruling that I hope will clarify what national governments can do in the face of a merger with (EU-wide) dimensions ... " he said.
The European Commission, which is responsible for ensuring members respect Europe-wide competition rules, can open legal proceedings against defiant countries at the European Court of Justice.
It lodged a first lawsuit against Spain before the EU court in January for giving its energy regulator powers to scrutinise foreign takeovers, which EU regulators considered "unjustified".
Madrid has been fighting tooth and nail to keep E.ON from taking over Endesa, even though EU competition regulators have approved the deal.
The E.ON-Endesa case has been widely seen in Brussels as a flagrant example of protectionism by Spain.
Meanwhile, a bitter bidding war for Endesa has erupted with Spanish construction firm Acciona and Italian electricity company Enel, both Endesa shareholders, teaming together for a rival bid.
The Spanish state holding company Sepi said Wednesday it would not sell its 2.95 percent stake in Endesa to E.ON, confirming an already understood stance.
Combined with the holdings of Acciona and Enel, the Sepi stake amounts to almost 49 percent of the shares in Endesa, making E.ON's chances of a successful bid very
AFP 28 1831 GMT 03 07
Copyright© 2007 AFP. All Rights Reserved.
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