EDP Denies Merger Talks

Portuguese utility Energias de Portugal (EDP) issued a stock market filing July 4 denying reports of talks of a tie-up with Spain's Gas Natural.

"Following the news published yesterday July 3 by Reuters news agency with the title 'Gas Natural reaches out to EDP over merger deal', EDP hereby denies the existence of negotiations between the two companies regarding this subject," EDP said.

Reuters had reported that such a merger would be worth €35bn ($40bn) and that top executives at both companies had held informal talks about it.

Gas Natural, much the larger of the pair, has yet to issue an equivalent stock market statement on the subject as at 1pm Spanish time July 4. Sources at the Spanish company denied to NGW there had been any talks with EDP about any corporate operation.

The duo have considerable overlap in the Iberian and Latin American markets, which would have made securing an EU competition approval problematic. Gas Natural completed the takeover of smaller Spanish utility and generator Union Fenosa in 2009.

Shares in EDP fell on news a month ago that public prosecutors in Portugal had named EDP's CEO since 2006 Antonio Mexia as a suspect in a corruption investigation, along with the head of EDP’s renewables business Joao Manso Neto, and two directors at the country's gas/power grid operator REN, Joao Conceicao and Pedro Furtado. 

Mark Smedley