The European Commission is unlikely to intervene in the Gas Natural bid for Endesa, despite concerns that the alliance will ultimately reduce competition in European energy markets.
The decision is expected to be based on the fact that both Endesa and Gas Natural have limited turnover outside Spain, leaving the Commission with limited jurisdiction. Instead, Spanish regulators will have sole antitrust authority in the event that less than one third of Gas Natural and Endesa’s total European turnover is achieved outside Spain.
However, in order to ensure that the EU is involved in the hostile Gas Natural bid, Endesa has restated its 2004 earnings under IFRS accounting standards, a move which increased sales beyond Spain to 36%. Gas Natural, meanwhile, has submitted contradictory figures that exclude EU involvement.
Spanish regulators the CNE have already approved the merger despite the fact that the merged Gas Natural-Endesa would effectively create a duopoly in Spain following an agreed sale of Endesa assets to Iberdrola. In the likely event that Spanish authorities are responsible for reviewing the deal, Madrid is also widely expected to approve the deal.
In other news, Endesa has acquired 34% of the total energy interconnection capacity between France and Italy put out to tender in the past ten months, amounting to 29% of the total capacity put out to tender by the French grid operator (RTE) in November.