Mergers: Commission requests Spain to lift conditions imposed on acquisition of Endesa by Enel and Acciona

The European Commission has formally requested Spain to comply with its decision adopted in December 2007 under Article 21 of the EU Merger Regulation to withdraw the conditions imposed by the Spanish Energy Regulator (CNE) and later modified by the Spanish Minister of Industry and Tourism on the acquisition of the Spanish energy company ENDESA by ENEL of Italy and ACCIONA of Spain. This merger was cleared by the Commission under the EU Merger Regulation in July 2007 (see IP/07/1023). In December 2007, the Commission concluded that the Spanish conditions were contrary to EU law and requested Spain to withdraw them by 10 January 2008 (see IP/07/1858). Spain did not comply with the decision and the Commission opened infringement proceedings (see IP/08/164). Today's request by the Commission takes the form of a “reasoned opinion”, the second stage of infringement proceedings under Article 226 of the EC Treaty. If there is no satisfactory reply within one month the Commission may decide to refer Spain to the European Court of Justice.

On the basis of powers granted by Spanish Royal Decree-Law 4/2006, the CNE decided on 4 July 2007 to impose a number of conditions on the Enel/Acciona/Endesa operation. This decision was adopted without prior communication to (or approval by) the Commission.

On 19 October 2007, and following an appeal lodged by Enel and Acciona against CNE's decision of 4 July, the Spanish Minister of Industry and Tourism adopted a decision modifying some of the conditions imposed by CNE and withdrawing others.

On 5 December 2007, the Commission adopted a decision declaring that the CNE decision, as partially modified, breached Article 21 of the EU Merger Regulation because:

the CNE took its decision without any prior communication to (and approval by) the Commission and
the conditions imposed by CNE on Enel’s and Acciona's acquisition of joint control over Endesa were contrary to the EC Treaty’s rules on the freedom of establishment and the free movement of capital (Articles 43 and 56 of the EC Treaty) and, partly, the free movement of goods (Article 28 of the EC Treaty).

The Commission's decision of 5 December 2007 required Spain to withdraw by 10 January 2008 the conditions imposed by CNE’s decision. As the Spanish authorities did not inform the Commission of any steps or measures taken in order to comply with the 5 December decision, the Commission opened an infringement procedure against Spain and sent Spain a letter of formal notice (see IP/08/164).The Spanish authorities' reply failed to inform the Commission that the illegal measures had been withdrawn and the Commission has therefore decided to pursue the infringement procedure.

General information on infringement proceedings is available at:

http://ec.europa.eu/community_law/infringements/infringements_en.htm