Endesa vs. Gas Natural

On September 5th 2005, Gas Natural launches a tender offer to obtain the control of Endesa. Gas Natural offers 21,30 euros per share, paying 13,85 in shares of the company and the rest, 7,45 in cash. Endesa was valuated in  22.549 millions euros, and Gas Natural conditioned its offer to obtaining 75% of the shares.

In 2002 Gas Natural had tried a similar takeover to control Ibredrola. This operation had been valuated in 15.000 € and was refused because of regulatory reasons in 2003.

Endesa and Iberdrola had also tried previously a merger without success.


The resulting company

According to Gas Natural estimates, the resulting group will be the 3rd energetic company in the world after the Italian Enel and the German E.On. In Latin America it will be the 1st energetic company with 30 million of clients.

They estimate the final capitalization in 30.000 million, with assets valuated in 62.000 million euros.

The initial price of Endesa in the market was 18.306 million euros.

To obtain the money, Gas Natural got an agreement with Iberdrola who, after the acquisition will buy to Gas Natural, Endesa assets with a value of 8.000 million euros.

Gas Natural also has a loan of 7.806 millons euros with the banking group Societe Generale, UBS Investment Bank and La Caixa.


Endesa arguments against the takeover

Under Endesa point of view, Gas Natural wants to achieve the control on Endesa without paying the bonus for it, considering that the valuation they make of the company was insufficient.

About the synergies, Endesa considered that Gas Natural does not provided value to Endesa in the supply of gas and distributing gas is not the same than distributing electricity, so consequently management synergies were insignificant in this sense.

Related to the commercialization of gas, Endesa already commerce with it so synergies would also be very small.

Endesa though that due to this merger, Spain would hand over the leadership to their principal rival considering that Gas Natural would not be able to manage a bigger a more global company. Under Endesa’s point of view, Gas Natural would not create but destroy the value of the company, because they have no experience in management, acquisition and integration of big companies.

Finally they argued that the announced synergies were overvalued and as the payment to stockholders will be partially in shares, the price was not enough.

qOn september 6th 2005, Endesa refuses the offer and announces defensive actions.


    • On November 8th 2005, a favorable report from the National Energy Commission (CNE) authorized the takeover of gas Natural for Endesa, imposing 19 conditions assumable by Natural gas.
    • On November 23th 2005 Endesa sues Gas natural and Iberdrola to estimate their agreement was a hostile takeover.
    • On February 2006, the German E.ON was incorporated into the struggle as white knight and carried out a counter-bid for Endesa, improving the previous offer by 30% and offering 27,5 euros per action.
    • Government does not agree with the German offer, because they do not want EON to control the Spanish company.
    • CNE put several conditions on the acquisition:
      • Requirement that Endesa maintains its brand for a five-year period.
      • Ban on sale of assets in the two archipelagos and Ceuta and Melilla in five years.
      • Obligation to use Spanish coal.
      • Obligation to do not make strategic decisions affecting the security of supply contrary to Spanish law.
    • European Commission opened infringement proceedings against Spain for this increase in powers. It interpreted it as an attempt to hamper the German acquisition.
    • On April 28th 2006, Supreme Court halted the authorization of the Council of Ministers on the Gas Natural takeover.
    • On November 25th  2006, Acciona announced the purchase of 10% of Endesa, with the desire to expand up to 25%, helped by Santander Bank.
    • On February 27th 2007, the Italian Enel (owned by the Italian state), bought a 10% Endesa and expressed its intention to expand its share by 7% additional.
    • At the end of march 2007 the acquisition price arise 40€. But ENEL owned  24,9% of shares and Acciona 21%.
    • Enel and Acciona launch a joint bid with a minimum price of 41 euros per share.
    • On April 2sd 2007 an agreement among EON, Enel and Acciona end with EON’s offer.
    • On April 11th 2007 Enel and Acciona launch an acquisition offer for 41,3€ per share.
    • On October 5th 2007 Enel and Acciona get the control of 92% of Endesa.
    • On February 20th 2009 Acciona sell its shares to Enel, being the Italian company owner of the 92% of Endesa’s capital.