The European Commission has concluded that Spain has violated European merger laws in imposing conditions on Eon over its hostile takeover bid for Endesa.

Preliminary investigations by the Commission raise serious doubts as to the compatibility with EC law of conditions imposed by the Spanish energy regulator CNE in its late July decision.

In particular, the Commission considers the conditions violate rules on free movement of capital and the freedom of establishment, it said in a statement.

The ruling relates to the Spanish government approval of the takeover, but with the imposition of 19 conditions, including stripping generation assets from the group.

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