Brussels, 18/05/2001 (Agence Europe) - Competition Commissioner Mario Monti reacted to the surprise entry of EDF (Electricité de France) in the capital of the Italian enterprise Montedison with a 3.97% stake. He said: "The expansion of dominant companies in markets still being liberalised such as electricity is a worrying phenomenon, which does not favour competition. However, the Commission does not always have the right to intervene". Mr Monti also pointed out that EDF's acquisition does not give the French company majority rights in Montedison and hence does not require notification to the Commission. He deplored, moreover, the existing imbalance in the electricity sector between the Member States that do not all apply the same level of openness given that there are no strict norms in the directive on liberalisation of the sector. In Italy, the operation raised a general outcry, mainly from the part of Confindustria (employers) that expressed "alarm" at the risk that "a European dimension monopoly might be created". Montedison, associated with Sondel, a Falck subsidiary, is on the way to becoming the second largest electricity producer in Italy, behind Enel. The latter is still held at 65% by the State but weakened by the obligation to reduce its presence on the market though the sale of assets. EDF's entry into the Montedison capital could thus prefigure a substantial rise in power by the French group on the Italian market.
In its defence, EDF declared that it was simply a matter of "minority financial participation" in the context of "diversification of its portfolio", arguments that were not found convincing. According to the economic press, EDF has taken the side of Franco-Polish businessman Romain Zaleski, who is seeking to obtain control of Montedison with the support of large banks (Banca di Roma and Sanpaolo-IMI).