MADRID, Feb 17 - Gas Natural (GAS.MC) said on Tuesday the Economy Ministry had backed a 16.7 billion euro ($21.12 billion) merger with utility Union Fenosa (UNF.MC).
The Ministry said it will not raise last week's competition watchdog approval at a Cabinet meeting, thus clearing the way for the next steps in the merger.
"This means the Ministry considers the National Competition Commission's (CNC) decision is effective," a Gas Natural spokeswoman said.
Gas Natural already owns 15 percent of Fenosa and may now purchase a 35 percent stake held by builder ACS (ACS.MC). Securities regulations would then oblige the gas company to launch a tender offer for all other outstanding Fenosa shares.
The share bid will be priced at 18.05 euros per Fenosa share and Gas Natural has said it hopes to complete the move in April. Union Fenosa shares closed at 17.70 euros on Tuesday.
The gas company has also called for shareholders to give financial backing on March 10 for the merger with a 3.5 billion euros rights issue, which key shareholders oil company Repsol (REP.MC) and savings bank La Caixa have fully underwritten.
Gas Natural also plans to part-finance the deal from 3 billion euros of asset sales, including any disposals mandated by the CNC.
Divestments mandated by the CNC include selling Gas Natural's stake in gas distribution company Enagas (ENAG.MC), and reduce its links to Cepsa (CEP.MC) by standing down from the oil group's board to avoid competition issues with Repsol (REP.MC).
It will not, however, have to sell off Fenosa's 50 percent share in a joint gas venture with Italy's ENI (ENI.MI). ($1=.7908 Euro)
The Ministry said it will not raise last week's competition watchdog approval at a Cabinet meeting, thus clearing the way for the next steps in the merger.
"This means the Ministry considers the National Competition Commission's (CNC) decision is effective," a Gas Natural spokeswoman said.
Gas Natural already owns 15 percent of Fenosa and may now purchase a 35 percent stake held by builder ACS (ACS.MC). Securities regulations would then oblige the gas company to launch a tender offer for all other outstanding Fenosa shares.
The share bid will be priced at 18.05 euros per Fenosa share and Gas Natural has said it hopes to complete the move in April. Union Fenosa shares closed at 17.70 euros on Tuesday.
The gas company has also called for shareholders to give financial backing on March 10 for the merger with a 3.5 billion euros rights issue, which key shareholders oil company Repsol (REP.MC) and savings bank La Caixa have fully underwritten.
Gas Natural also plans to part-finance the deal from 3 billion euros of asset sales, including any disposals mandated by the CNC.
Divestments mandated by the CNC include selling Gas Natural's stake in gas distribution company Enagas (ENAG.MC), and reduce its links to Cepsa (CEP.MC) by standing down from the oil group's board to avoid competition issues with Repsol (REP.MC).
It will not, however, have to sell off Fenosa's 50 percent share in a joint gas venture with Italy's ENI (ENI.MI). ($1=.7908 Euro)
