Brussels, 25/04/2006 (Agence Europe) - On 25 April, the European Commission issued its highly awaited decision on competition in the EU energy market by approving (under the EU Merger Regulation) the acquisition of sole control through a public takeover bid for Endesa S.A. (“Endesa”), a Spanish energy company mainly active in the electricity sector, by E.ON AG (“E.ON”), based in Germany. The Commission concluded that the deal would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it. The Commission's examination of the proposed takeover confirmed that 'the parties have limited overlapping activities in the electricity markets in France, Italy, Germany and Poland. In Spain, where Endesa is one of the two major operators in the electricity market, E.ON is not active at all.' The Commission also examined the impact of the transaction on gas procurement, and concluded that the transaction would not make 'a significant difference, as the two companies essentially do not overlap in terms of suppliers (E.ON purchases its natural gas from Russia, Norway, the Netherlands, Germany, UK and Denmark, whereas Endesa procures gas from Spanish wholesale markets, Algeria, Nigeria and Qatar).' In the context of the energy sector competition investigations, the Commission says 'it will continue to keep the development in the German and Spanish markets and the other markets concerned under strict scrutiny.' The announcement of the planned takeover bid led Spain to pass a special defensive law boosting the control powers of Spain's competition authority (see EUROPE 9146). At the end of March this year, EU Internal Market Commissioner Charlie McCreevy said that infringement proceedings would soon be launched against the new Spanish law (see EUROPE 9157).