Enel SpA (ENEL.MI) finalized a deal to buy a remaining 25% stake in Endesa SA (ELE.MC), giving it full control of the Spanish utility but raising concern over the Italian company's growing debt.

The deal seals the split after more than 16 months of disagreements on how to run Endesa.

Enel will pay EUR11.11 billion in cash and assets for the 25% stake in Endesa owned by Spanish energy and infrastructure company Acciona SA (ANA.MC), Acciona said in a filing to Spain's stock market regulator early Saturday.

Acciona will receive EUR8.22 billion in cash, and renewable energy assets, with a capacity to generate 2,104 megawatts in electricity, that are worthEUR2.89 billion.

Enel has reportedly lined up around EUR8 billion of financing from a pool of Italian and Spanish banks to pay the cash amount.

As a result of the deal, Enel will become solely responsible for Endesa's strategy. The Italian utility had already spent almost EUR30 billion to buy a 67% stake in Endesa in 2007, but it had to jointly run the company with Acciona.

The relationship between the two companies in running Endesa has been rocky in the past year.

Acciona and Enel squabbled over senior management appointments and other strategic decisions at Endesa. They also weren't able to reach an agreement over the setup of a planned renewable-energy joint venture to merge Endesa and Acciona's renewable assets.

The deal reached Friday puts an end to a saga that started in September 2005, when the Spanish government brokered an unsuccessful attempt to take over Endesa by Spanish utility Gas Natural SDG SA (GAS.MC), followed by attempts by Germany's E.ON AG (EOAN.XE) to acquire the company, which were blocked by Spain's government.

As part of the 2007 agreement between Acciona and Enel, the Spanish company held a put option allowing it to force Enel to buy out its stake from March 2010 at about EUR41 a share - well above Endesa's share price of EUR24.21 before its shares were suspended earlier Friday.

Although Enel can now run Endesa independently, the deal carries some risks under current tough market conditions because Enel's already high debt will rise further.

With the deal, Endesa's debt will increase significantly from EUR50 billion at the end of 2008, with the sale of non-core assets such as its Italian power lines helping to cut debt.

As part of the deal, Endesa approved a gross dividend of EUR5.897 per share, or EUR6.24 billion in total for all Endesa shares, helping the Italian utility to limit the increase in its debt.

Acciona, meanwhile, will cut its debt considerably. Acciona's debt was estimated close to EUR17.95 billion at the end of 2008, of which EUR12.74 billion corresponded to the acquisition and consolidation of Endesa, Santander said in a recent report. Without Endesa, Acciona's debt at the end of 2008 would only have been EUR5.21 billion, the bank estimated.

The Spanish company had a net gain of some EUR1.85 billion from the sale, according to Dow Jones Newswires calculations. Acciona has earlier said it plans to use at least part of the gain to further expand its already sizable renewable energy business.

-By Bernd Radowitz and Luca Di Leo, Dow Jones Newswires; +34-618-526-915; djmadrid@dowjones.com;
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