Spain taken to court for blocking Endesa takeover[fr][de] 

Having twice already (EurActiv 26/09/06) ordered Spain to withdraw conditions violating EU laws on mergers imposed on E.ON's bid for Endesa, the Commission decided on 28 March to refer the country to the European Court of Justice. 

E.ON's proposed acquisition was approved in April 2006 by Competition Commissioner Neelie Kroes (EurActiv 25/04/06), but has been stalled because of Spanish rules applying to takeovers from foreign companies, which the Commission says are contrary to the principles of freedom of establishment and free movement of capital. 

While Spanish authorities argue that they have taken steps to address the Commission's concerns, namely by reducing the duration and scope of some of the conditions, the EU's executive arm said that changes "are not sufficient". 

The German power company, on 26 March, boosted its takeover bid by 3%, offering €40 per share instead of €38.75, in the hope of acquiring the 50% of shares necessary for its bid to succeed. But Endesa's two largest shareholders – Spanish construction group Acciona SA (21%) and Italian utility Enel SpA (24.99%) – have announced that they plan to team up to make an even higher offer of at least €41 per share. 

Spanish regulations prevent any firm from making a rival bid for Endesa until six months after E.ON's offer expires, on 3 April 2007. E.ON has thus accused the two companies of unlawful activity and attempting "to deceive Endesa's shareholders and manipulate the market price of Endesa’s stock", and has filed a complaint with the Spanish regulator. Enel Chief Executive Fulvio Conti said that his company and Acciona were asking the Spanish regulator to withdraw the six-month delay. "This is their responsibility and our right," he said on 28 March. 

Despite Acciona and Enel's attempts to highlight the "Spanish" nature of their future bid, E.ON’s proposition appears the stronger of the two. On 26 March, Endesa's board of directors advised shareholders to accept the German offer: "E.On's offer is the only one that complies with all the regulatory requirements and has legal and financial guarantees. It is also the only bid that has been approved by all the relevant authorities," they said. 

Spanish savings bank Caja Madrid also boosted E.ON's bid by agreeing, the same day, to cede its 10% share in Endesa to the German utility, during a two-year equity swap, in which it would keep its voting rights and following which E.ON can decide whether to buy the shares or hand them back. 

A successful takeover would create a global energy colossus, with more than 22 million customers in Europe, the United States and South America.