E.ON, the German energy group, was on a collision course with Brussels last night after launching a surprise €55 billion (£38 billion) bid for Endesa, the Spanish power company.

The bid to create the world’s biggest power company came just a week after the European Commission threatened to crack down on the Continent’s dominant energy companies for shutting out competition and foreshadowed scrupulous examination of deals in the energy sector.

Neelie Kroes, the Competition Commissioner, gave warning that “persistent concentration is a core problem in the markets”. She added: “There can be no alternative to meticulous scrutiny of future merger operations.”

The German group, which is the second-biggest energy generator and supplier in Britain, sought to break up a forced marriage between Spain’s Gas Natural and Endesa with the biggest offer for a power company in history.

E.ON has offered €27.5 a share for the Spanish company, a premium of 31 per cent over Gas Natural’s offer. With Endesa’s debt of €26.1 billion, the deal is worth €55 billion.

Endesa said last night that it had made no commitment to E.ON and added that the price offered, while clearly an improvement on Gas Natural’s bid, “does not adequately reflect the real value of Endesa”.

The approach by E.ON, which has been described as friendly, comes only days before the acquisition of Endesa by Gas Natural, which had been supported by the Spanish Government, was due to be completed.

The combination of E.ON and Endesa would create the world’s biggest power company, producing 421 terrawatt hours of power across the globe for 54 million customers, against a backdrop of soaring energy prices.

The deal will have to be approved by Brussels regulators.

The sensitivity of E.ON’s approach was underlined by the fact that Angela Merkel, the German Chancellor, personally called José Luis Rodríguez Zapatero, the Spanish Prime Minister, about the counter-offer for Endesa.

E.ON’s bid follows a prediction by Wulf Bernotat, its chief executive, that E.ON, Enel (of Italy) and EdF (of France) would form a leading group of pan-European energy companies. Herr Bernotat has also predicted that prices would continue to rise as the number of suppliers shrinks.

He said in Madrid yesterday: “This transaction places E.ON in a unique position to develop the business into the market leader in the evolving pan-European market. We fully support the EU’s vision and we are committed to strengthening the interconnection of the European markets.”

E.ON hopes that its offer for Endesa will result in a deal by the middle of this year. It is funding the offer through a combination of cash and debt. Talks between the companies started in December after E.ON walked away from an £11 billion bid for ScottishPower.

Speculation that other energy groups, including Enel and Gas Natural, would respond to E.ON’s challenge sent shares in Centrica and ScottishPower higher.

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