Spain’s biggest power group, Endesa, is reported to be in “friendly” merger talks with its closest rival, Iberdrola. Such a merger would create one of Europe’s biggest power groups, similar in size to the recently restructured RWE of Germany following its union with VEW, and with a joint market capitalisation of more than $30 billion.
Local press reports said Endesa and Iberdrola had informed the National Securities Market Commission (CNMV), the Spanish regulator, that they were in discussions, and preferred to finalise a merger by 2003, when the Spanish market is due to be fully liberalised.
But such a consolidation of the Spanish market is likely to meet with stiff government opposition, and only be permitted on the basis of substantive undertakings by the two to divest generation and distribution assets of a quality attractive to investors. Endesa/Iberdrola have signalled their willingness to shed some of their Spanish assets
