ACS AI Claims

Spain's competition authority has allowed Gas Natural SDG SA (GAS.MC) to hold onto the gas unit of Union Fenosa SA (UNF.MC), establishing instead some asset-sale requirements to clear the takeover of the country's third-largest power utility.

The antitrust agency said in a statement Thursday that Gas Natural will divest assets representing 2,000 megawatts of gas-fired power generation.

Gas Natural last year agreed to buy 45.3% of Union Fenosa from Spanish construction company Actividades de Construccion y Servicios SA (ACS.MC) and launch a full takeover bid. It already had purchased 9.9% of Union Fenosa from ACS in August. Antitrust clearance was required for the takeover, valued at about EUR18.26 billion.

Italy's Eni SpA (E) owns 50% of Union Fenosa Gas, which operates a liquefaction plant in Egypt, an asset that guarantees gas supplies for Spanish electricity plants. Eni has preemptive rights to purchase the other half if the unit is sold.

Accepted remedies proposed by Gas Natural to get antitrust clearance include a commitment to "maintain Union Fenosa Gas' autonomy to supply gas to third parties."

Gas Natural also agreed to sell gas distribution assets, representing a 9% share of Spain's gas distribution network market, the agency said.

Gas Natural also proposed to sell its 5% stake in pipeline operator Enagas SA (ENG.MC). It also agreed to "lower ties" with Compania Espanola de Petroleos SA (CEP.MC), as the Spanish oil company is a competitor of Gas Natural shareholder Repsol YPF SA (REP).

Agency Web site: www.cncompetencia.es

-By Santiago Perez; Dow Jones Newswires; +34-91-395 8125; djmadrid@dowjones.com

(Bernd Radowitz contributed to this article.)

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