Brussels and Madrid lock horns on energy merger rules

The European Commission has for the second time overturned Spanish conditions on a merger that would create Europe's largest energy company, saying they violate the EU principle of the free movement of capital.

The issue began last summer when Spain's energy regulator Comision Nacional de Energia (CNE) imposed 19 conditions on German energy giant E.ON's €26.9 billion bid for Spanish electricity firm Endesa, although EU regulators had already approved the merger unconditionally.

"I...