If at first you don't succeed, throw in the towel and move on to more promising prospects.
Although German utility giant E.ON
At this point, it doesn't seem as though the Spanish government is about to pitch a fit on the order of what we saw in France, when rumors abounded that PepsiCo
So what does E.ON look to get for its nearly $66 billion -- an amount that includes Endesa's debt? Well, the deal would expand E.ON's reach to 50 million customers in 30 countries and would make the company a truly pan-European utility, stretching from Scandinavia into Iberia. On a side note, it would also give E.ON exposure to the French and Latin American markets -- areas that might be politically schizophrenic, but still lucrative.
Is E.ON overpaying? Probably, but there are obvious advantages to scale, and this pact would bring that in spades. Additionally, it seems that only an E.ON shareholder revolt or insurmountable government/regulatory obstacle would scupper the deal -- E.ON just has too much cash with which to raise its bid even if Gas Natural wanted to counterbid.
I've been a fan of E.ON for some time now. And while big deals like this make me a little nervous, I think I see at least some of the same virtues in the combination as management does. Stay tuned, though, and let's see how the various governmental bodies handle a cross-border buyout of this magnitude.
For more Foolish thoughts on utilities both here and abroad:
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).