Brussels, 16/11/2005 (Agence Europe) - After nearly two months of deliberations, the European Commission decided on 15 November to reject Endesa's complaint concerning Gas Natural's failure to notify its proposed takeover of Endesa to the Commission, as the proposed deal falls outside the Commission's jurisdiction and should therefore be examined by Spain. Briefing the other Commissioners, Neelie Kroes said the two-thirds rule for deciding on an EU dimension for mergers should be revised: “Despite its substantial impact on energy markets at European level, the proposed operation falls outside the Commission's competence as both Gas Natural and Endesa achieve more than two-thirds of their respective turnover in Spain.” Kroes added that sharing power had already led to incoherence in the past in the E.ON/Ruhrgas merger and this could re-occur in the future.
The Merger Regulation provides that when all the undertakings concerned by a concentration have more than two thirds of their Community-wide turnover in one and the same Member State, the concentration does not have a Community dimension and falls outside the Commission's competence. Coherence is needed for energy (where there is little competition because of the size of companies) and financial services, said Kroes, where huge mergers create European giants escaping from Commission rules because of the two-thirds rule (like Credit Lyonnais/Credit Agricole and Parisbas/BNP in France, BBV/Argentaria and Banco Santander/Banco Central Hispano in Spain, and AbbeyNational/Lloyds TSB in the UK). The two-thirds rule is no longer an efficient sharing of power at national and EU level and can even lead to incoherent treatment, added Kroes, wanting to consult stakeholders and Member States to prepare new legislation shortly to amend the Merger Directive.