SCOTTISHPOWER owner Iberdrola has made a formal complaint to the European Commission about the French state's role in its energy sector, sources close to the company have revealed.
Along with the ACS, construction group EDF – which is 85 per cent owned by the French government – is considering launching a takeover bid for Spanish utility Iberdrola. If successful, EDF is expected to assume control of Glasgow-based ScottishPower.
But Spanish sources last night disclosed that Iberdrola wanted the European Commission to investigate the French state's role in the energy sector.
The sources argued that the French government has a "privileged position" in the management of EDF that constitutes an illegal barrier to potential investors and contravenes principles of the single market such as free circulation of capital.
One well-placed source said Iberdrola's argument rests on the fact that the French state, independent of its share holding, appoints the chairman and chief executive of EDF and six of the board.
It also appoints a further six members at shareholder meetings, giving it effective final control of the company. It would require an act of parliament for the French state's share holding in EDF to fall below 70 per cent.
Iberdrola is also arguing that the legal framework of the state's ownership of EDF breaks European principles.
The source said while the UK, and to an extent Spain, had liberalised their energy markets, there was a "complete lack of reciprocity" from France and Germany.
The source did not say what remedy Iberdrola is seeking, but its chairman, Ignacio Sánchez Gálan, has already hit out at a possible approach from EDF, saying the group is "not welcome" and calling the French protectionist.
"What they say is: France is for the French and so is everywhere else," Gálan said last week.
Iberdrola faced a similar complaint when it launched its £12 billion takeover of ScottishPower in late 2006, when the SNP wrote to the commission over subsidies available to Spanish companies for buying foreign firms.
Ironically, SNP First Minister Alex Salmond leapt to the defence of Iberdrola on Sunday, warning he would report EDF competition watchdogs in the UK and Europe if it proceeded with a bid.
The full article contains 373 words and appears in The Scotsman newspaper.
