Spain and Germany discuss E.ON take-over of Endesa

Spanish Prime Minister Jose Luis Rodriguez Zapatero said he had discussed with German Chancellor Angela Merkel the plans of German energy company E.ON to take over Spanish peer Endesa. He added that the Spanish Industry Ministry would make a statement on the takeover conditions soon.
"Within the next few days the Industry Ministry will rule on the appeal filed by E.ON on the decision of (Spain's energy regulator) CNE," Zapatero said during a Spain-Germany bilateral meeting at Meersburg, near Lake Constance in Germany.

Zapatero said he expects a satisfying resolution for Germany's and E.ON’s interests, and "above all," the interests of Spanish consumers. Zapatero said he expects the outcome to be "positive, fostering improved (bilateral) relations."
At the end of July, Spain's energy regulator, the CNE, cleared E.ON’s takeover bid for Spanish energy company Endesa but added 19 conditions. Spain conditioned the takeover on E.ON’s divestment of about a third of Endesa's electricity assets in Spain, citing concerns about the security of the country's power supply. The conditions prompted complaints not only from E.ON but also from the European Commission, which raised concerns Spain was erecting barriers to the European single market.

E.ON’s takeover bid for Endesa was cleared by the European Commission at the end of April. At the time, the commission said it didn't see any antitrust concerns, also pointing to the limited overlap of both companies. The commission gave Madrid until to explain the restrictions or face legal action. However, Spain has signalled in the past few weeks that it will water down the takeover conditions.
Recently, Zapatero said he expects "a happy ending" to the saga that has pitted Spain against the European Union and rattled the Spanish energy sector.

A merged E.ON and Endesa would create the world's largest energy utility, with more than EUR 75 bn in annual sales and at least 50 mm customers in about 30 countries in Europe, the US and Latin America.
The deal also would give E.ON access to the Latin American electricity market, where Endesa is a dominant player, as well as Endesa's 15 % share in the Medgaz gas pipeline, which will connect Algeria with Spain and provide Europe with an alternative to Russian supplies.