After losing in its bid for Madrid’s Endesa last year, E.On is getting a crack at a batch of its power plants in France, Spain, Poland and Italy for which it has agreed to pay a cool $18.6 billion. So, what makes Spain’s utility industry so irresistibly attractive? Could be that demand for electricity in that country has outpaced the European Union average for more than a decade. And, of course, a few other compelling factoids.

E.ON AG, Europe's second-biggest power supplier, agreed to pay 11.8 billion euros ($18.6 billion) for Endesa SA power plants in Spain, France, Poland and Italy.

E.ON, which lost a bidding battle over the Spanish generator last year, will pay 8.9 billion euros and take over 2.9 billion euros in debt, the Dusseldorf-based utility said in an e-mailed statement today. The deal is likely to close in the third quarter.

Enel SpA and Acciona SA acquired Madrid-based Endesa in October in the world's biggest utility takeover after agreeing to sell generators to E.ON in exchange for the German utility withdrawing a rival offer. E.ON Chairman Wulf Bernotat, who is selling assets in Germany to end European Union investigations into the business, aims to expand into markets where demand is growing faster than at home.

``With this transaction we are considerably expanding our position in Spain, where we are already strong in the wind power market, and Italy,'' Bernotat said in the statement. ``The purchase price reached was determined by several banks and reflects the fair market value of the shares.''

E.ON gained as much as 1.75 euros, or 1.4 percent, to 123.06 euros and traded at 122.69 euros as of 10:19 a.m. in Frankfurt. Endesa fell 23 cents to 34.06 euros in Madrid.

Growth Opportunities

Endesa will sell two units in Spain with installed capacity of 963 megawatts. E.ON also gains Endesa's French, Italian, Polish and Turkish units with a combined production of 53 terawatt-hours, enough to supply about 12 million European homes. E.ON will also buy Spanish power producer Electra de Viesgo from Enel.

The German power producer is second to Electricite de France SA in Europe and both are looking for growth opportunities to consolidate their positions as the continent's largest suppliers. The Paris-based utility has held talks to expand into Spain, and may bid for Iberdrola SA, the nation's second-biggest electricity supplier.

Spain is attractive as its demand for electricity has outpaced the European Union average for more than a decade, and is expected by the government to continue doing so until at least 2011.

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