In a press release, E.ON commented that the agreement had avoided an impending stalemate. The Dusseldorf-based company had experienced a number of setbacks in its attempt to acquire the Spanish utility, not least in the form of the Spanish government, which seemed intent on keeping Endesa in Spanish hands.
E.ON’s withdrawal from the race voids the Spanish market regulator’s ruling that prohibited Italian utility Enel and Spanish energy group Acciona from making an offer until six months after E.ON’s bid had expired. As a result, Enel and Acciona are to jointly proceed with their E41 per share offer for Endesa. If this endeavor is successful, E.ON will receive a number of the companies’ assets, corresponding to a total volume of about E10 billion, in Spain, France and Italy, as well as Poland and Turkey.
In Spain, E.ON will acquire Enel’s Viesgo, a power utility with installed generation capacity of 2,400MW that looks set to increase by 50% by 2010, as a result of ongoing construction projects. E.ON will also receive Spanish generation capacity from Endesa. The utility said that, by 2010, its Spanish power plant capacity will have a balanced energy mix of approximately 6,400MW, with a market share exceeding 10%.
In Italy, E.ON will acquire E.ON Endesa Italia, with about 5,000MW in generation capacity, which will complement E.ON’s existing Italian wholesale electricity and gas trading. Meanwhile, in France, E.ON will acquire Endesa France/SNET, which has a power plant capacity of around 2,500MW.
E.ON’s chief executive, Wulf Bernotat, said: Acciona and Enel’s involvement in Endesa has made our original goal of acquiring a majority stake in Endesa impossible. Obtaining a minority interest in Endesa would have led to a stalemate between the shareholders and triggered unpredictable lawsuits. The agreement we have reached with Enel and Acciona will rapidly establish clarity for everyone involved.
The chairman of Acciona, Jose Manuel Entrecanales, added: This agreement ensures peace within Endesa and a better deal for shareholders and at the same time further enhances competition in the Spanish market with the entrance of a new player.