The French utility Electricite de France SA ( EDF) admitted that it had exploratory talks with the Spanish construction company ACS and is interested in the Spanish energy market. However, the company declined to comment on a recent report in The Wall Street Journal that EDF and ACS were already in advanced talks about teaming up to buy two Spanish utilities.
The newspaper, citing unidentified people close to the discussions, said EDF and ACS — whose full name is Actividades de Construccion y Servicios SA — had already 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 USD 134 billion including debt and excluding possible premiums, the report said.
If the deal would go through, the Spanish construction company ACS, which owns 13 percent of the Bilbao-based Iberdrola, would buy it outright and sell off assets such as Scottish Power to EDF. The French giant would then take over parts of Fenosa. ACS owns 45 percent of Fenosa. Such a transaction would be the biggest cross-border acquisition in the European energy sector, dwarfing last year’s takeover of Spain’s Endesa by Italy’s Enel, and herald a huge shake-up in the sector. News reports last week also claimed that French President, Nicolas Sarkozy, and the newly re-elected Spanish premier, Jose Luis Rodriguez Zapatero, had discussed the issue and Zapatero pledged to consider option of providing the French companies gaining access to the profitable Spanish energy market.