Translated material
Endesa lost
E.ON, Enel and Acciona resolved the dispute amicably
The most expensive takeover deal fell through. The German energy giant E.ON, which has been trying for more than a year to overcome obstacles to the purchase of the Spanish energy company Endesa, has stopped fighting. The story of the failed merger will be a serious lesson for European politicians and entrepreneurs: it turned out that in the European Union, free of territorial and financial borders, individual governments can erect insurmountable administrative barriers.Late Monday, E.ON said it was withdrawing its offer to Endesa shareholders. The German concern consistently increased the amount of its offer throughout the year, so that eventually the price of a controlling stake in Endesa increased to 42 billion euros. However, if at the initial stage the Germans had to overcome the resistance of the Spanish authorities, then at the final stage the competition moved into the sphere of business - albeit initiated by politicians. The Spanish holding Acciona and the Italian energy concern Enel merged and bought a 46% stake in Endesa on the market. In this situation, E.ON considered it pointless to continue the fight. “The arrival of Acciona and Enel in Endesa made the task of consolidating a controlling stake in this company impossible. The acquisition of a minority stake would lead to a stalemate in the relationship between shareholders and would lead to unpredictable lawsuits,” said E.ON CEO Wulf Bernotat.
However, retreating, the German concern received significant trophies. E.ON has concluded a deal with Acciona and Enel, which cannot but upset official Madrid. After all, the consequences of this compromise will most acutely affect the future of Endesa itself. It is obvious that with their tripartite agreement the former rivals signed the verdict on the dismemberment of Endesa. Observers call this company the main loser in the poker of buying and selling its assets.
The agreement provides that in exchange for the withdrawal of its offer and provided that Enel and Acciona consolidate a controlling stake in the Spanish company, E.ON will receive a set of assets in Spain, Italy, France, Turkey and Poland with a total value of about 10 billion euros. “The agreement we have reached with Enel and Acciona will provide clarity to all parties involved in the situation. At the same time, E.ON immediately gains an attractive market position in Spain, Italy and France,” said Wulf Bernotat.
In addition, an important element of the deal was that its participants renounce the lawsuits that were filed in the process of fighting each other. But Brussels does not give up its claims. Consistently supporting E.ON in countering the protectionism of the Spanish authorities, the European Commission now intends to achieve compliance with its instructions. As is known, European officials challenged the list of behavioral conditions that the Spanish antimonopoly authorities put forward for the German concern. Yesterday, European Commission spokesman Jonathan Todd said that Brussels will not stop the process initiated against Madrid in the Supreme European Court.
The Spanish authorities can only put a good face on a bad game. Spanish Finance Minister Pedro Solbes said yesterday that the agreement between E.ON, Enel and Acciona was only a "transfer of capital" and affected mainly foreign markets, and the "fundamental" part of Endesa was now "out of danger." Industry Minister Juan Clos said almost the same thing. “The agreement reached will allow Endesa to maintain its headquarters in Spain and it will not be fragmented, which is especially important,” REUTERS quotes him as saying. True, the minister makes a reservation: “I don’t know whether the decision made is the best way out of the current situation, but it was made.”
In addition to Endesa, a major Spanish official was also injured. In protest against the actions of his own authorities, the head of the agency for the supervision of exchanges, Manuel Conte, resigned, claiming that Enel and Acciona hid their true intentions for too long and demanding the imposition of strict sanctions against them.
Despite the defeat of E.ON, analysts consider the outcome of the fight around Endesa to be the optimal resolution of the dispute between the rivals. In Spain, E.ON will receive from Enel a stake in the electricity concern Viesgo, whose production capacity is about 2,400 megawatts (and by 2010 this figure will increase by 50%). In addition, E.ON will also receive part of Endesa's energy facilities and will eventually occupy 10% of the Spanish electricity market, becoming the fourth most important player. In addition, E.ON will take fourth place in the Italian energy market, and in France, the German concern, having received shares in Endesa France/SNET, will become third. “Thanks to the good market positions that E.ON has achieved in Spain and Italy, as well as the attractive base in the French market, E.ON is consolidating its strong position in the European energy market,” said Wulf Bernotat. He added that now the concern “will have opportunities for growth in other markets, especially in Russia, where there are many such opportunities and they are huge.”