Madrid attacks Eon's €29bn cash offer for Endesa

The following is letter sent the the Editor of the Financial Times:

Sir,

The Spanish government appears to have objected to the unexpected (by them) offer for Endesa, the Spanish electricity company, by E-ON, the German electricity and gas company. Until then, the Spanish electricity sector was nicely settled at home with the likely successful acquisition of Endesa by Gas Natural, the Spanish gas company (“Madrid attacks Eon's €29bn cash offer for Endesa” Financial Times 23 January, 2006).

It appears that the Spanish government believes that the electricity sector is too important to be left in the hands of a German company and only a company based in Madrid can be trusted to ‘do the right thing’. I wonder which stakeholders they are trying to protect here.

They clearly don’t believe that the telecom sector is so strategic or ‘special’ otherwise they may have objected when Telefónica, the Spanish telecoms company made a multibillion takeover of O2 in the UK. Although we will have to wait and see when someone comes along and makes a play for Telefónica. We will see how strategic the telecom sector then becomes.

Onésimo Alvarez-Moro

See article:
Eon, Germany's biggest power group, on Tuesday launched a €29bn cash offer for Spain's Endesa, raising prospects of renewed consolidation in Europe's energy sector.

If Eon succeeds it would be the word's largest utility deal, valuing Endesa at €55bn, including debt and minority interests. It would create the world's biggest utility with 50m customers across 30 countries in Europe and the Americas.

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