Tense takeover battle for Spain’s Endesa energy company

by wsws (reposted)

Tue, Oct 31, 2006 7:25AM

The longstanding dispute over the takeover of Spanish energy company Endesa exploded again last week, after the European Commission sent the Spanish government a formal notice over the latter’s refusal to lift the conditions it imposed on the €27 billion takeover bid by German energy giant EON. A successful bid by EON, the world’s largest privately owned energy provider, would turn the company into the world’s biggest utility and allow it access through Endesa into Spain, Italy, France and Latin America.

The formal notice was the result of the EC’s verdict at the end of September that the Spanish government’s actions were an attempt to “disguise interference with the flow of capital” and illegal under EU anti-trust legislation. Madrid must comply or face court proceedings.

Spain has justified its actions by citing Article 21 of the European Union merger regulation, which allows member states to block takeovers on the grounds of “public security.” Prime Minister José Zapatero has stated, “We support foreign investment. . . In recent times, we have seen the arrival of important international companies—French, American. We only have one dispute regarding the energy sector, which we are very concerned about as a country.”

Spanish companies have been some of the most prolific in foreign hostile takeovers in the last few years, with more than €48 billion spent in the first half of 2006 in foreign acquisitions.

More
http://wsws.org/articles/2006/oct2006/spai-o31.shtml

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