The European competition watchdog on Tuesday issued a legally binding decision that the Spanish energy regulator must withdraw the conditions it has issued for allowing the takeover of Endesa by E.ON, a deal which has already been cleared by the Commission.  Several days after E.ON's bid for Endesa was announced, Spain adopted urgent new legislation which gave it the right to make the merger conditional on a number of preconditions.  The 19 conditions imposed on the merger included the requirement that E.ON would have to dispose of a large portion of Endesa's assets, including certain power stations.  The ruling declares that Spain has breached Article 21 of the Merger Regulation because its decision was adopted and entered into force without being communicated to, or approved by, the Commission.  The onerous restrictions attached to the approval further breach EC law on free movement of capital and establishment.  Spain must now withdraw the conditions or face legal sanctions.

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