Commission scarcely satisfied by measures taken by Spain in proposed acquisition of Endesa by E.ON

Brussels, 29/11/2006 (Agence Europe) - The European Commission has informed Spanish authorities that, after its preliminary assessment, the changes brought by Spain for the acquisition of Endesa by E.ON still violate Article 21 of the EC regulation on mergers. The Spanish authorities are still requiring E.ON to guarantee that it will not give up those parts of the company operating in the Spanish islands and that will retain the name “Endesa”. All coal used must come from Spain and the shipment of gas to other countries would not be allowed. Following a preliminary assessment, the Commission decided that these conditions infringe EU treaty rules on the free movement of capital (Article 56) and the freedom of establishment (Article 43). According to the Commission's preliminary conclusions, some of these conditions also violate the rules on the free movement of goods (Articles 28 and 29 of the EC Treaty). This episode is the final misadventure in a case which has seen several exchanges between the Commission, the Spanish government and the Spanish national energy commission (CNE) (see EUROPE 9295, 9299 and 9300). Spain now has until 13 December to respond to the Commission, after which time the Commission could adopt a decision calling on Madrid to remove the conditions in question. (cd)