Europe looks to take the national champion route

摘要

There is a certain irony that in the same week the European Commission has announced that it will publish the interim findings from its competition inquiry in December, two European utilities confirmed their acquisition intent. Whilst EON has so far only confirmed an interest in acquiring Scottish Power and Gas Natural's hostile bid for Endesa has been rebuffed, both developments suggest Europe's market may see a new consolidation phase over the next six to nine months. In addition to Spain and the UK other acquisition markets are likely to include the Netherlands and Italy while EdF's impending IPO may see it back on the acquisition trail by the end of the year. By next summer, as the clock ticks down to the July 2007 deadline for full market opening in Europe's gas and electricity markets, the utility landscape may look considerably different. Any formal acquisition will provide the first real test for competition commissioner Nellie Kroes, particularly if the current inquiry correlates a lack of market competition development with the growth of national champions. But these same national champions may well counter that it is because of slower competition growth that further consolidation is required to develop sufficient economies of scale. Such an argument is considered somewhat facile, as the leading national champion utilities in Germany and France have developed within a heavily protected marketplace.