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Court rules state's buy of EnBW stake unlawful
October 6, 2011 / 12:30 PM / 6 years ago

Court rules state's buy of EnBW stake unlawful

<p>A traffic "STOP" sign is seen under the logo of German energy provider EnBW next to the reactor building of the nuclear power plant in Phillipsburg, southwest Germany, March 21, 2011. REUTERS/Kai Pfaffenbach</p>

STUTTGART, Germany (Reuters) - The constitutional court of the German state of Baden-Wuerttemberg ruled on Thursday that the state government’s purchase of EDF‘S (EDF.PA) 45 percent stake in utility EnBW (EBKG.DE) was unlawful.

The court said that Stefan Mappus, the state’s conservative premier at the time, should have consulted the state parliament in Stuttgart before agreeing to the 4.7 billion euro ($6.26 billion) deal in December 2010.

But the state will keep its stake and the ruling will have no further consequences relating to its acquisition even though the two current ruling parties lodged the initial legal challenge.

“We have EnBW. That’s a fact and we will work with it,” SPD deputy floor leader Andreas Stoch said. A spokesman for the state’s finance and economy ministry said that the ministry did not plan further action, greeting the verdict as strengthening parliamentary democracy.

EDF said the ruling had no impact on the validity of the sale of the stake.

The southern German state agreed to buy EDF’s 45 percent stake for 41.50 euros a share, and offered remaining shareholders the same price.

Mappus said at the time the purchase prevented another foreign buyer from possibly acquiring a stake in EnBW, without identifying the suitor.

The shares have lost almost 20 percent since then, partly because the Fukushima nuclear disaster in Japan prompted the German government to phase out the use of nuclear power sooner than initially planned, burdening utilities across Germany.

Also in the wake of the nuclear disaster in March, Mappus’ conservative CDU party lost the Baden-Wuerttemberg state elections, bringing to power the first German state premier from the anti-nuclear Green party, Winfried Kretschmann.

The Greens and its coalition partner, the Social Democrats, took the legal action at the time of the deal, decrying Mappus for striking a backroom deal and sidestepping parliament.

($1 = 0.751 Euros)

Writing by Ludwig Burger and Peter Dinkloh; Editing by David Cowell

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