German energy giant E.ON launched, on Feb. 21, a $29.1 billion euro (US$34.6 billion) counter takeover bid for leading Spanish electricity group Endesa to create the world's leading power and gas supplier.
In a move that could potentially rile the Spanish government which has always been keen on creating a national champion, E.ON said it was offering 27.50 euros per share for Endesa, 29% more than a rival bid by Spanish utility Gas Natural, which only recently received the go-ahead from Madrid. Quizzed about possible resistance from the Spanish government, which noted that it had the power to veto the German approach because it held a blocking share, E.ON chairman Wulf Bernotat said: "We know there is a golden share."
Nevertheless, E.ON was confident that the "strategic and market logic" of the deal, which would create the world's leading power and gas company, would prevail, Bernotat said. "In the end, it is a matter for Endesa's shareholders to decide and more than 50% of them are based outside Spain. We hope that they will be allowed to exercise their right to sell their shares," the German chief executive said.
He also sought to placate concerns about possible large-scale restructuring or job cuts as a result of the merger. "We're not planning any additional restructuring or redundancies on top of those already being implemented by Endesa management. Endesa employees can feel secure," Bernotat said.
Neither did the German firm see any possible objections on the part of the EU competition authorities, the chairman continued. "We don't expect problems from an anti-trust point of view. We have no overlapping position in Spain and Portugal. There's no geographical overlap. It'll be a complementary transaction," he said.
The combination of E.ON and Endesa would "create the world's leading power and gas company serving more than 50 million customers in more than 30 countries", putting it ahead of companies such as Electricite de France (EDF), Tokyo Electric, RWE, Enel and Suez.
Copyright Agence France-Presse, 2006