Electricité de France has come under a hail of fire from European power players over what are seen as its anti-competitive practices during an extensive acquisition spree. Angered by a state-owned utility buying into their market, Italy has delivered a formal complaint to the European Commission. EdF, Europe’s biggest power supplier, initially took a 4 per cent stake in Italy’s Montedison utility which then increased to 20 per cent, making EdF Montedison’s biggest single shareholder. In response, the Italian government has limited EdF’s voting rights to just 2 per cent, and has now proposed a law banning the acquisition of substantial stakes in Italian groups by companies from countries which do not concede the same access to their own markets.
EU officials have expressed their intense opposition to state-owned monopolies acquiring publicly traded energy groups at a time when neighbouring European countries are opening their markets. While EdF has been investing some 11 billion euros buying stakes in power companies in Europe, Latin America, Africa and Asia, France has been reluctant to open its own market above the bare minimum.
EdF has already come under attack from Britain over the purchases of London Electricity and the electricity supplier SWEB in south west England.
Meanwhile in Spain, through an indirect acquisition in the country’s fourth largest utility, Hidroeléctrica del Cantábrico, EdF is provoking a similar response. The Spanish government has blocked the voting rights of Electricidade de Portugal and EnBW, in which EdF has a 34.5 per cent stake. EnBW paid $1.6 billion for 60 per cent of Hidroeléctrica and under Spanish law the government can limit EnBW’s voting rights to 3 per cent if the company is heavily influenced by a foreign, state-owned power group, here EdF; and in Hidroeléctrica’s case, EdP.
The European Commission is to investigate EdF over the anti-competitive allegations but may yet defend EdF’s position in the interests of free movement of capital.
