ENERGY: COMMISSION REJECTS ENDESA REQUEST TO JUDGE ON GAS NATURAL TAKEOVER BID.

Although Endesa's audited accounts for 2004 reveal that its Spanish turnover exceeded the two-thirds threshold laid down in Article 1 of the Merger Regulation, the firm had submitted some additional adjustments to the Commission. These adjustments, which included the elimination of revenue from gas swaps, state aid, assets, discounts, taxes and levies, would have led to a deduction of more than euro 4.4 billion from its 2004 turnover. However the Commission deemed that several of these adjustments were unjustified under the provisions of the Merger Regulation, and declared that more than 75% of Endesa's turnover was achieved within Spain.

Spain's incumbent natural gas company, Gas Natural, announced the euro 22 billion takeover bid for Endesa on September 5, and notified the Spanish authorities one week later. Endesa, one of Spain's two main electricity operators, claimed that the bid should be analysed at European level, and lodged a complaint concerning Gas Natural's failure to notify the European Commission of the proposal. This led to weeks of acrimonious exchanges between the two firms, with Gas Natural accusing Endesa of "delaying tactics" and threatening legal action against the Commission if it upheld...