CONDITIONS UNJUSTIFIED

By Ray Fleming SPAIN and the EU Commission in Brussels are continuing their fight over the bid by the German energy giant E.ON to take over the Spanish utility Endesa which has been going on for the whole of 2006. New readers start here: E.ON is ready to pay 37 billion euros for Endesa but the Spanish government, which claims it has no objection in principle, has twice added conditions to the deal which the Commission has ruled to be unacceptable under EU law. This week the EU's Commissioner for Competition told Madrid that ”I regret that the Commission has once again been obliged to intervene to avoid that a member state places unjustified conditions on a major European takeover.” The conditions under reference had included a ban on selling Endesa assets in the Balearics and Canaries, keeping the brand Endesa for at least five years and using only coal mined in Spain. E.ON has no objection to these conditions but the EU Commission sees things differently and has given Spain until January 19 to withdraw them or face legal action. The Spanish government has said it will not accept “different treatment from other countries”, a reference probably to Italy's recent success in preventing a merger between the Spanish roadmaker Abertis, and the Italian Autostrade group. At stake is the determination of the Commission to establish a “level–playing field” market in the energy sector by dismantling cartels and eliminating barriers to cross–border takeovers.