Spain slammed over Endesa merger

Energy takeovers are as much about politics as they are business

The European Commission has told Spain that it has broken EU merger rules in its handling of the takeover of power firm Endesa by German rival E.ON.

The Spanish government has backed the 27bn-euro ($34bn; £18bn) tie-up, but imposed 19 conditions, including the sale of a number of power plants.

Brussels had already told Spain not to use its veto to block the takeover.

The Commission said it would wait for Spain's response before possibly ordering it to drop the conditions.

E.ON's bid for Endesa has been a big issue in Spain, where the government had already given its blessing to a bid from Spanish energy group Gas Natural.

Surging energy prices worldwide have left many countries concerned about the security of supplies and eager to see the creation of large national providers.

At the same time, many power companies are looking to access markets such as Spain, in an effort to reduce costs and become pan-European energy providers.