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Merger deal called off

Spain’s utility companies, Endesa and Iberdrola, have called off a deal to merge the two companies. Strict conditions imposed on the merger by the Spanish government have made the deal impossible, according to both companies.

Endesa and Iberdrola said requirements, such as the divestment of key assets, would seriously diminish the shareholder value of both companies.

The merger’s conditions were seen as especially difficult for Iber- drola, which would have been forced to sell a big chunk of its profitable hydroelectric generating capacity.

Endesa and Iberdrola account for 80% of Spain’s electricity indus- try. About 40% of the combined generating assets of both companies are hydroelectric, while the merger would have required reducing it to about 15%.