Innocent but not a victim

27 February 2006 By Hugo Dixon

The notion in Italy that Enel is the victim of a French stitchup to keep it out of Suez is understandable. But Enel also misjudged the politics, and its own strength. Given that it didn’t put a bid on the table, it can’t protest too much.

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Italian politicians were up in arms over Gaz de France's planned merger with Suez. Enel, the Italian electricity group, said last week it wanted to acquire Suez's electricity assets.

The Italian government's first response has been to cancel an ItalianFrench summit on energy and counterfeit goods planned for Monday.

Another idea that was reportedly floated was to try and intervene on BNP Paribas's recent bid for Italy's BNL, but that seems to be technically impossible. The same applies to the idea of reintroducing a law designed to stop Electricite de France from voting more than 2% of Edison, the Italian utility it controls.

A third idea that is reportedly being considered is to stop companies that are monopolists in their own countries from owning stakes in the Italian energy assets that Enel has been forced to divest. Both EDF and Suez currently own such assets.

Italy hasn't yet complained formally to the European Commission. But the EU said that the SuezGdF deal appeared to break no rules on the free movement of capital.

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