Spanish authorities investigate sale of DESA to Dutch Nuon

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Spain's state department for economy and energy has opened an investigation into the EUR 109 million sale last October of wind plant developer and operator Desarrollos Eólicos SA (DESA) to Dutch water and electricity utility, Nuon. The investigation, according to DESA's former owner, Abengoa, is based on a regulation prohibiting foreign companies from entering liberalised Spanish sectors without establishing reciprocity guarantees. Although insiders are unclear regarding the exact form such guarantees would take, the general understanding is that either Nuon should open up its own share capital to Spanish power corporations or the Dutch government should provide similar openings in other Dutch companies. Abengoa, which operates on Spain's stock market, has not been able to confirm that such guarantees exist. It says it is confident, however, that the state department investigation will find no reason to block the sale. Abengoa is one of Spain's largest engineering groups as well as a wind pioneer. Its decision to sell DESA was part of its strategy to consolidate its position in the biomass market. The money from the sale to Nuon allowed Abengoa to buy America's fifth largest bioethanol company, High Plains Corporation, for $92.4 million.

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