Spain regulator approves Enel-Acciona bid for Endesa

Utility regulator Comision Nacional de Energia (CNE) approved July 4 a joint bid for Spanish utility Endesa by Enel and Acciona, applying certain conditions.

The most significant of the 12 conditions relate to the Italian government’s ownership of 32 percent of Enel. CNE referred to “the control and special powers which the government of the Republic of Italy enjoys in Enel.”

CNE said it reserves the right to veto board or shareholder meeting decisions made with the support of Enel when those decisions affect the public interest or national security.

In April, German utility E.ON had conceded that its bid for a majority stake in Endesa was likely to fail and agreed instead to split up Endesa’s global holdings with two big Endesa shareholders, Italian utility Enel and Spanish construction company Acciona. (HNN 4/4/07)

The CNE conditions are to come under the scrutiny of the European Commission. The EU is completing an investigation into the competition aspects of the takeover.

If the CNE uses its veto, it could suspend voting rights attached to shares bought in the current takeover bid. The condition would end when the restrictions on ownership of state-controlled Enel’s shares have been lifted, or when the Italian government ceases to have “special powers” over the utility, CNE said.

The 12 conditions also include keeping Endesa as a separate brand, managed and run from Spain, honoring its investment plans and keeping the Spanish company’s involvement in nuclear power distinct from the rest of its activities.

The parties can appeal the conditions to the Spanish industry ministry within 30 days.

Enel and Acciona, which already control 46 percent of Endesa, are offering 40.16 euros per share which values the Spanish company at about 42.5 billion euros (US$57.90 billion).

Endesa, Spain’s leading electrical company, is a key utility in Chile, Argentina, Colombia, and Peru and has business in Brazil.

Enel is present in Spain with Viesgo, which has about 2,200 MW of installed capacity and with Enel Union Fenosa Renovables, active in the wind and hydropower sector. Enel is also a key player in Latin America for renewable energy, with operations in Panama, El Salvador, and Brazil.

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