French utility eyes Spanish energy market

Globe and Mail
Associated Press
March 21, 2008

PARIS — The French utility Electricite de France SA has had exploratory talks with the Spanish construction company ACS and is interested in the Spanish energy market, a spokeswoman for EDF said Friday.

But spokeswoman Carol Ritrivi declined to comment on a report Friday in The Wall Street Journal that EDF and ACS are in advanced talks about teaming up to buy two Spanish utilities for more than $100-billion.

The newspaper, citing unidentified people close to the discussions, said EDF and ACS — whose full name is Actividades de Construccion y Servicios SA — have discussed forming a bidding team that would make simultaneous offers for two Spanish utilities, Iberdrola DS and Union Fenosa SA.

The deals would have a combined value of $134-billion including debt and excluding possible premiums, the report said.

Iberdrola, based in Bilbao, is expanding internationally and is in the final stages of a deal to acquire Maine-based Energy East — parent of Central Maine Power, Rochester Electric and Gas Corp., and New York State Electric & Gas Corp. — for $4.6-billion and the assumption of $4-billion in debt.

Ms. Ritrivi noted that EDF chief Pierre Gadonneix has said his company is interested in the Spanish market but would not make a hostile bid if the Spanish authorities were opposed.

Ms. Ritrivi confirmed EDF has had “contacts” with ACS that she qualified as “more or less exploratory.”

The Journal report said the deal is far from certain, and could run into possible resistance from Spanish authorities and potential opposition from competition regulators in several countries and jurisdictions, as well as Iberdrola.

ACS, Iberdrola and Union Fenosa spokesmen were unavailable for comment on Friday, a public holiday in Spain.