EU accuses Spain and Italy of opposing foreign bids

[Strengthandhonour]

EU accuses Spain and Italy of opposing foreign bids

Bloomberg News
Friday, September 21, 2007

BRUSSELS: Spain and Italy were warned Friday by antitrust authorities of the European Union that they faced fines for protecting utilities and highway companies from foreign bids.
The European Commission accused Spain of breaking EU law by imposing conditions on a bid by Enel and Acciona for joint control of Endesa, the country's largest power company.
The Brussels-based regulator also warned Italy to remove obstacles to a takeover of highway operator Atlantia by Abertis Infraestructuras of Spain.
The two cases are the latest in a battle by the commission to force EU governments to remove restrictions on foreign takeovers. Under EU rules, the commission has exclusive authority to review large takeovers that affect markets in the 27 member nations.
In the Spanish case, the commission said its preliminary assessment was that restrictions imposed by the country's energy regulator on the transaction violated "EU rules on the free movement of capital, freedom of establishment and the free movement of goods."
Spain is studying the EU statement, said an Industry Ministry spokesman, who declined to be identified or to comment further.
Spain has 30 days to respond, the EU regulator said in a statement. The commission could force Spain to remove the conditions if it concludes that they broke European regulations.
Enel, based in Rome, and Acciona, a Spanish construction company, agreed on March 26 to acquire joint control of Endesa, which is based in Madrid.
Spain's energy regulator, the National Energy Commission, conditionally approved the offer on July 4. It ruled that the bidders must keep Endesa's spending plans through 2011 and the utility's board decisions will be subject to a veto.
The European Union, which approved the transaction on July 5, said at the time that it would study Spain's conditions to see whether they complied with EU rules.
Enel and Acciona appealed the Spanish regulator's ruling on Aug. 3. The Industry Ministry has until Nov. 3 to decide whether it will ratify or change the conditions set by the regulator.
The commission also turned up the pressure against Italy in a proposed toll-road merger.
The competition commissioner, Neelie Kroes, last year ordered Italian regulators to scrap restrictions on the transfer of Autostrade's concession to operate highways, which served to inhibit the takeover by Abertis.
Autostrade on Dec. 13 abandoned the merger, which would have created the world's largest highway operator, because of Italian opposition. But in February, Abertis revived its merger plan.
The commission reached a settlement with Italy in July. Kroes said she would drop a threat to sue, as long as Italy follows through on a proposal to change how it handles mergers of toll-road companies. Since then, no action has been taken, said a commission spokesman, Jonathan Todd.
Kroes wrote last week to Italy's public works minister, Antonio Di Pietro, and finance minister, Tommaso Padoa-Schioppa, indicating that unless the government removed the restrictions by Oct. 1, she would "have little choice but to propose to the commission a decision that the Italian measures are in breach" of EU rules, Todd said.
Di Pietro said that the government's new rules "should be published next week."
"The government is committed to maintaining its promises," Di Pietro said.
EU targets checks on farm goods The EU's financial regulator accused European governments and the bloc's executive arm on Friday of sloppy inspections on subsidized exports of farm products, saying they were weak, ineffective and predictable, Reuters reported from Brussels.
Apart from not checking enough high-value consignments, a major problem was that exporters knew about EU inspections in advance - defeating the point of on-the-spot checks, the European Court of Auditors said.



source: EU accuses Spain and Italy of opposing foreign bids - International Herald Tribune