Acciona, Enel to split Endesa
After over half a year of bids, counter-bids, economic nationalism versus pan-Europeanism, Spanish utility Endesa will end up being split between Spain's Acciona and Italy's Enel. The two companies, which already controller around 46% of Endesa's stock, with pay around $59 billion. Germany's E.On, which started the auction with a hostile bid, will withdraw from the fields. Spanish economic nationalists will be happy. In the deal that made it possible, E.On will buy Endesa's operations in the rest of Europe along with some Spanish assets owned now by Enel for $1 billion.
The players
Endesa is Spain's #1 electric utility owning from nuclear, hydroelectric, gas, oil, and coal, as well as wind plants. Endesa also has holdings Spanish natural gas companies, and markets energy to the rest of Europe. It also has considerable South American holdings.
E.On is one of the two largest power companies in Germany (nearly the same size as RWE), The company recently acquired RuhrGas, the #1 natural gas company in Germany. It also has extensive power holdings in the UK, US, and Scandinavia as well.
Acciona is a conglomerate that is involved primarily in energy, but also real estate, logistics, infrastructure, and water.
Enel is the #1 electric utility in Italy. It also has holdings in natural gas and construction. In 2005, it sold off a telecommunications division, Wind Telecomunicazioni, the #3 cell phone company in Italy (now owns by a private equity group). Enel tried to buy French water utility Suez in 2006, but the French government arranged it s that Gaz de France, the in-country bidder, won out.
Acciona is a company that specializes in infrastructure, including power generation, roads, and logistics.
Spain's Gas Natural was also an earlier bidder, though it dropped out when the bidding got hot. It's the #1 natural gas supplier in Spain and also has operations in Puerto Rice, Argentina, Colombia, and Brazil.
The deal
This deal gives these companies a strong position just as the EU is about to open up energy generation open to cross-border competition. The deal at this point seems final, but there are still regulatory hurdles and also opposition from Spanish conservatives, who plan lawsuits.
An article in the Financial Times, "Acciona Is Clear, Clever Winner In the Epic Battle for Endesa", April 4, 2007) sees Spain as the big loser, since Enel can sell off its interest at some later data at a guaranteed price, should the deal not work out.
"But the clear loser is Spain, whose protectionist meddling hasn't saved a national champion. … But few expect the management structure, where major decisions require unanimity, to be permanent. And Acciona has clearly and cleverly mapped out its exit route."
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