The European Commission Thursday asked Spain to lift the restrictions it imposed on Enel SpA's (ENEL.MI) and Acciona SA's (ANA.MC) acquisition of the Spanish power company Endesa SA (ENSTY) within one month or face court action.
When the takeover was cleared by the commission in 2007 the Spanish government forced the Italian energy group Enel and Spanish engineering firm Acciona to accept a series of conditions on their deal before allowing it.
The companies were forced to maintain Endesa as an independent company with executive offices in Spain and to keep the company's brand. The government also created limits for Endesa's debt-service ratio and dividend payouts. It also required Endesa to buy specific quantities of Spanish coal and maintain direct control of certain offshore energy assets.
The Spanish energy regulator imposed these conditions without seeking European Union approval, and the commission found the restrictions to be against European law in December 2007, asking Spain to remove them by Jan. 10.
However, Spain failed to comply with the commission's request and the European regulator had to open an "infringement" case against the country.
Thursday's escalation of the case means that "if there is no satisfactory reply within one month the commission may decide to refer Spain to the European Court of Justice," the commission said in a press release.