Spanish power and gas company Gas Natural has approached Portuguese rival EDP according to Reuters sources. As Sonia Legg reports, any merger would be worth 35 billion euros and form Europe's fourth biggest utility by market value.
It's already a force to be reckoned with in Spain. Now Gas Natural reportedly has plans to move into Portugal. Reuters sources say the Barcelona-based power and gas company has approached rival EDP about merging. Together they'd be Europe's fourth biggest utility by market value behind France's Engie and EDF and not far behind Enel and Iberdrola . EDP CEO Antonio Mexia has apparently been contacted by Gas Natural's Chairman and the potential deal would be worth 35 billion euros. It could also trigger a wave of consolidation among the region's big utilities. Many are seeking to gain scale and shift their revenue streams towards renewables to protect profits from steep competition and narrower margins. Local media is reporting that EDP has denied talks have taken place. But a Gas Natural-EDP merger is seen as a good strategic fit The two have a complementary footprint. The Spanish firm is strong in Chile and Mexico - while the Portuguese group is strong in Brazil and the United States.