M&A and Investment Banking

Enel Acquisition of – Case Study

1 Table of Contents

 Introduction

 Transaction Description

 Strategic Rationale

 Financial Impact on Enel Accounts

 Focus on Equity Swap Contracts

2 Enel Acquisition of Endesa

Introduction

3 Transaction Highlights

World’s largest utility deal ever given an offer price of €41.3 per share, equivalent to a total EV of €63.6bn

Largest cross-border cash offer ever launched by an Italian company and largest PTO ever launched in

Rapidly designed and executed, understood to be launched within 2 months from the presentation of the opportunity to Enel

The deal represented a transforming transaction for Enel, consolidating its presence in the European and Latin American electricity market

4 Global M&A in the Energy and Power Industry

5 Source: Thomson Financial, Institute of Mergers, Acquisitions and Alliances (IMAA) analysis. Key Parties Involved in the Transaction

 Enel is 's largest power company and 's third largest listed utility by  Listed on the and New York stock exchanges since 1999  Enel has the largest number of shareholders of any Italian company, at some 2.3m  It has a market capitalization of about €50bn (as of April 2007)  Total Installed Capacity: 40,475MW  2006A Revenues: €38,513m  2006A EBITDA: €8,019m  2006A EBIT: €5,819m  2006A Net Debt: €11,690m

is one of the main Spanish with activities in more than 30 countries throughout the five Continents  Its activities span from infrastructures, sources, mini-hydro, urban and environmental services, logistic and transportation, real estate, hospital management, among others  Acciona is listed on the IBEX-35 (ANA.MC) selective index with a capitalization of €10.3bn (as of April 2007)  Total Installed Capacity: 4,502MW  2006A Revenues: €6,272m  2006A EBITDA: €960m  2006A EBIT: €630m  2006A Net Debt: €1,085m 6 Key Parties Involved in the Transaction (Cont’d)

 E.ON is the world’s largest private power and gas company with over 30m customers in more than 20 European countries and the United States and a market cap of €68bn (as of December 2006)  Since its incorporation in 2000, E.ON has focused in the energy and gas supply, having successfully developed new markets in the United States, the , Central and Eastern Europe and Scandinavia  Total Installed Capacity: 28,172MW  2006A Revenues: €67,759m  2006A EBITDA: €11,353m  2006A EBIT: €8,150m  2006A Net Debt: €(268)m

 Gas Natural ranks as one of the biggest electricity operators in and sale in Spain

 The main activities are: supply, distribution and sale of in Spain, , Italy and Latin American (LATAM) countries

 2006A Revenues: €10,348m

 2006A EBITDA: €1,912m

 2006A EBIT : €1,263m

 2006A Net Debt: €3,091m

 Endesa is one of the largest electricity companies in the world  The fifth utility in Europe and the biggest in Spain, one of the main players in LATAM countries and in Mediterranean countries, is also present in other energy sectors such as gas, cogeneration and renewables  In total it has more than 22m of costumers worldwide  Small investors make up for the majority of the shareholder structure, with free float being around 80% of total shares  Total Installed Capacity: 47,113MW  2006A Revenues: €20,580m  2006A EBITDA: €7,139m  2006A EBIT: €5,239m  2006A Net Debt: €19,840m

7 Transaction Timeline

26 June 2 April Conclusion of the Enel and Acciona agree to transaction to sell sell €10bn of their assets 26 March operational assets in order for E.ON to Enel and Acciona agree to 19 July to E.ON. for withdraw its offer launch a joint takeover for Start of the acceptance €11.5bn the control of Endesa period for Endesa’s shareholders. Tender price is €40.16ps Gas Natural tender offer

2005 2006 2007 2008 2009 27 March The CNMV ( Regulator) gives 28 September The CNMV announces the final E.ON the possibility to E.ON. to result of the tender offer. Enel tender rise the offer price acquires 42.08% in Endesa offer (reaching a stake of 67.05%), and 11 April Acciona acquires the 3.97% of Enel and Acciona present Endesa shares (reaching a stake 27 February their tender offer to the of 25.01%) Enel acquires 9.99% of CNMV to acquire up to Endesa. 100% of Endesa at Between 1 and 12 March €41.3ps 25 June Enel enters in several Enel subscribes the equity swap contracts to acquisition of 25.01% of acquire up to 24.97% 4 June the Acciona stake in Enel reaches a stake of Endesa for a consideration 24.97% in Endesa through of €11.1bn the physical settlement of the equity swaps

8 Gas Natural Tender Offer

 Bidding Story:  On 5 September 2005 Gas Natural launched an unsolicited offer for the entire share capital of Endesa for a consideration of €7.34 in cash and 0.569 shares of Gas Natural for each Endesa share (the “GasNat Offer”), valuing each share of Endesa at €21.3. This implied a 14.8% premium over the previous day close (based on the price of Gas Natural before announcement) and an offer value of €22.6bn  In conjunction, Gas Natural announced it had reached an agreement with S.A. (“Iberdrola”) to transfer certain assets of the combined entity to Iberdrola, subject to the transaction being completed, (“the Iberdrola Agreement”). The objectives of the Iberdrola Agreement were to show proactiveness in relation to anti-trust issues and address part of the financing of the GasNat Offer  On 21 April 2006, the Spanish Supreme Court also suspended GasNat Offer on the basis that the GasNat Offer could be illegal since it did not follow the recommendation from the TDC(1). Effectiveness of the suspension of GasNat Offer was conditional on Endesa making a deposit of €1,000m  Strategic Rationale:  Becoming a key integrated player in the electricity and gas sector in Spain and reinforce its position in LATAM countries  Reaction:  Endesa considered the offer unacceptable because not consistent with the fair value of Endesa  Defensive tactic: sale of €3bn of non-strategic assets, proceeds distributed through extraordinary dividends

9 Note: (1) Competition Defence Tribunal

E.ON Tender Offer

 Bidding Story:  On 21 February 2006, E.ON publicly announced the launch of a counteroffer for Endesa offering €27.50 in cash per share, (the “E.ON Offer”)  The E.ON Offer represented a 48.2% premium to Endesa’s undisturbed closing price on 2 September 2005 and a 24.5% premium to the nominal value of the GasNat Offer as of 24 February  Endesa’s welcomed the fact that the E.ON Offer was superior in value to the GasNat Offer, but still believed that the price offered did not reflect the real value of Endesa  On 27 September 2006, E.ON announced its commitment to increase the offer to €35ps, all in cash (“E.ON Second Offer”)  On 2 April 2007 Acciona/Enel/E.ON reached an agreement to avoid a potential situation in which none of the parties would achieve any control of Endesa and the shareholder structure would result unsustainable in the medium to long term  Following the agreement E.ON withdrew the offer  Strategic Rationale:  Exposure to markets where E.ON was not present such as Spain, where they would become the biggest player, and LATAM countries  Reaction:  The Spanish Government set a series of regulatory measures to contrast the acquisition of the biggest energy player by a foreign enterprise

10 Enel Acquisition of Endesa

Transaction Description

11 Minority Stake Acquisition by Enel

 On 27 February 2007 Enel announced the acquisition of 9.99% of Endesa and in the following days entered into equity swap agreements (with the option of physical delivery) with MB and UBS as detailed below:

 On 4 June 2007 Enel reaches a 24.97% stake in Endesa through the settlement of the equity swap contracts  Acciona’s stake in Endesa: 21.036%  Enel + Acciona = 46.01% of Endesa

12 Source: Company Information Agreement between Enel and Acciona

 On 26 March 2007, Enel and Acciona signed an agreement to implement a joint management project for Endesa based on a ten-year agreement (renewable for other five years)  Key elements of the agreement are: 1) Enel and Acciona to launch a tender offer 2) Creation of a NewCo to which Enel and Acciona would transfer stakes of 5.01% of Endesa each 3) Subsequent transfer of 40.00% of Endesa to the NewCo, which would be controlled 50.01% by Acciona 4) 20% free float replenishment

 Based on the joint agreement upon settlement of the tender, Acciona would increase its stake in Endesa to 25.02% (50.01% ownership of NewCo which holds a 50.02% stake in Endesa), and Enel would receive all the remaining shares

13 Agreement between Enel and Acciona (Cont’d)

The agreement had a period of validity of 10 years with an extension option of 5 years

Main Corporate Governance Rules Termination Clauses

NewCo In case of a “deadlock” situation concerning “reserved matters”:  Equal representation by both partners in the Board of Directors  For the first 3 years, deadlock resolution would be solved through:  Chairman appointed by Acciona  Limited period of negotiations between  Certain “reserved matters" require unanimous representatives of both parties consent  The decision with less impact on the existing Endesa situation and business practices

 Acciona and Enel equally represented in the Board of  After the third anniversary, deadlock resolution would Directors via NewCo be solved through:

 Chairman appointed by Acciona  Asset split between the two parties

 CEO appointed by Enel  Exercise of put option by Acciona to Enel  Strategic, financial and operating decisions require the unanimous consent of both partners

14 Share Price Reaction during the Process

15 Source: Bloomberg. Enel and Acciona Agreement with E.ON

 On 2 April 2007, E.ON signed an agreement with Enel and Acciona in order to put an end to the substantial uncertainty surrounding the takeover bid for Endesa. The agreement establishes that E.ON: 1) Would not lift the conditionality to the takeover bid designed to acquire a majority stake in Endesa and would renounce to make a new takeover offer for Endesa in the next four years 2) Would receive a significant portfolio of assets in Spain, Italy and France as well as in Poland and Turkey  In Spain, E.ON would acquire the power utility Viesgo from Enel  Viesgo had an installed generation capacity of ca. 2,400MW  This generation capacity would increase by ca. 50% by 2010, as a result of ongoing construction projects  Furthermore, E.ON received additional Spanish generation capacity from Endesa  Following the transaction, E.ON’s Spanish power plant capacity would have a balanced energy mix in 2010 of approximately 6,400MW  E.ON would become the No. 4 player in Spain with a market share of more than10%  In Italy, E.ON acquired Endesa Italia, with ca. 5,000MW in generation capacity. This would make E.ON the fourth largest power producer in Italy  In France, E.ON would become the No. 3 player in the power generation sector through the acquisition of Endesa France/SNET, which had a power plant capacity of ca. 2,500MW

16 Enel – Acciona Joint Tender Offer

 On 11 April 2007 Enel and Acciona SA, following the announcement of the unsuccessful outcome of E.ON’s tender offer, filed to the Spanish Stock Exchange Authority Comision Nacional del Mercado de Valores (“CNMV”) a joint tender offer (the “Offer”) for up to 100% of Endesa shares  Given that Endesa shares were listed also on the NYSE as ADSs and on the Off-Shore Exchange in Santiago de , an identical offer was launched both in the US and in Chile  Enel engaged five banks to act as Joint Lead Arranger and Joint Bookrunner on Enel's €35bn syndicated term loan facility to cover all financing requirements related to the acquisition of Endesa’s shares

Offer  Joint tender offer by Enel and Acciona to acquire up to 100% of the common stock of Endesa Offer Price  €41.30 for each Endesa share (€43,727m) all in cash Offer Price  €41 per share plus interests (3-month Euribor) accrued from the announcement of the agreement between Enel and Acciona (26 Calculation March 2007) to the date when the offer was authorized (31 May 2007). Price to be adjusted by any dividends distributed by Endesa before the results of the offer were published Conditions  Reaching 50% plus one share of Endesa (Enel and Acciona controlling ca. 46% of Endesa’s share capital before launch of tender offer)

 Removal of certain by-laws limitations, namely, the provisions limiting the shareholders’ voting rights and envisaging restrictive criteria on the composition of Endesa’s BoD as well as the appointment and characteristics of its members Approvals  Spanish energy regulator, Ministry of the Industry, Tourism & Commerce and Spanish competition authorities approval Financing  Acciona: full funding available for up to 25% of the Offer

 Enel:  Subscription of a €35bn of fully underwritten syndicated term loan facility, made up of three tranches consisting of:  €10bn with a 1-year maturity (subject to a term-out option for a further 18 months)  €15bn with a 3-year maturity  €10bn with a 5-year maturity  Renewal of the MTN program, whose amount would be raised from €10 to 25bn  One or more bond issues by 31 December 2007 in an aggregate amount corresponding to €5bn 17 Enel – Acciona Joint Tender Offer (Cont’d)

The proposed financing structure of Enel for the acquisition of Endesa 74.98% stake are summarized as follow:

18 Enel – Acciona Joint Tender Offer (Cont’d)

11 April Launching of the Tender Offer

23–27 April Pre-notification contacts with the EU antitrust authorities

23–27 April The “F14 Authorisation”

07–11 May U.S. Offer: Submission of no-action letter

07–11 May Communication of the transaction to the EU antitrust authorities

02–06 July Clearance from the EU antitrust authorities

09–13 July CNE to grant F14 Authorisation

16 July Filing Schedule Tender Offer

18 July Publication of the mandatory announcements of the Tender Offer

19 July Beginning of the acceptance period

03–14 September Endesa General Shareholders Meeting

20 September End of the acceptance period

28 September Publication of the outcome of the Tender Offer by the CNMV

03 October Settlement of the Tender Offer

19 Enel – Acciona Joint Tender Offer (Cont’d)

Following the joint tender offer launched by Enel and Endesa in 2007 resulted in Enel and Acciona controlling a 92% stake in Endesa Endesa remains listed with an 8% free float

20 Enel Disposal Plan

 During the course of 2009 Enel announced its intention to realize a significant disposals program with the main purpose of improving its leverage given the material increase after the acquisition of Endesa  The main assets that Enel planned to dispose were the following:  Enel Linee Alta Tensione Srl (“ELAT”)  18,583Km network of high voltage power network  Enel Distribuzione SpA sold the entire share capital of Enel Linee Alta Tensione Srl to Terna SpA, pursuant to the sale agreement signed between Enel SpA, Enel Distribuzione and Terna on 19 December 2008. Leonardo & Co., and Banca IMI served as independent advisors to Enel Distribuzione, whereas Terna availed itself of the services of Goldman Sachs and J.P. Morgan  Purchase price of €1,152m was paid in full at the time of closing

 Enel Rete Gas  Enel Rete Gas operates in the natural gas distribution sector in Italy, with a market share of roughly 12% in terms of gas distributed  Enel Distribuzione SpA sold 80% of the share capital of Enel Rete Gas SpA to F2i and Private Equity  Purchase price of €516m. Before the closing, Enel Rete Gas distributed dividends to Enel Distribuzione for ca. €209m. Considering also the deconsolidation of Enel Rete Gas debt, Enel’s net debt cut was of over €1,200m

 Disposal of a minority stake in Enel Greenpower  Enel’s renewable energy company, with 618 factories in 16 Countries, with roughly €1.3bn of EBITDA  Sale of 32% of share capital of through an IPO  Price set at €1.6 per share, €2.3bn raised (falling short of the target of raising €3bn). Greenshoe option for 210m shares to reach an offer size of €2.6bn  The proceeds after fees from the transaction were €2.2bn

21 Enel Rights Issue Following the transaction, in order to preserve its rating, on 12 March 2009 Enel announced to the market (strategy and FY2008 results presentation) the intention to launch a ca. €8.0bn rights issue for balance sheet strengthening purposes On 29 April, Enel’s EGM has approved the envisaged €8.0bn rights issue On 6 May Enel’s BoD has approved the capital increase and provided instructions to file the prospectus of the offering with Consob The rights issue has been underwritten by a syndicate of banks including: Mediobanca, Banca IMI and JP Morgan acting as Joint Global Co-ordinators and Joint Bookrunners Credit Suisse, Goldman Sachs, Morgan Stanley, and Bank of America / Merrill Lynch acting as Co-bookrunners CDP, exercised both the rights granted directly to it and the rights granted to the MEF (following the sale of the MEF rights to CDP). More specifically, CDP subscribed 31.24% of the offered shares for roughly €2.5bn. Therefore, following the full subscription of Enel’s capital increase, CDP reached a shareholding of 17.36% of Enel share capital while the MEF retained a direct shareholding equal to 13.88% Following the subscription period 99.58% of rights has been exercised and the proceeds from the transaction has been €7.9bn

22 Acciona Put Option on Endesa Shares

Enel granted to Acciona the right to sell its direct and indirect stake in Endesa. This option could be exercised at any time between April 2010 until 2017  The price per Endesa share would be the higher of:  The fair price (as established by investment banks)  The Acciona-Enel offer price (€ 40.16/share) adjusted for the cost of carry (3m Euribor plus 85bps less any dividend distributions) The exercise of the put could be accelerated with a mutual agreement of both Enel and Acciona  Following the acquisition of Endesa there have been several articles and comments by the managers of Enel and Acciona indicating that the relationship between the two companies has not been as smooth as desired  Tensions may be the result of two very different management styles:  Acciona is perhaps the more dynamic partner, looking to maximize its negotiating position at all times, and not afraid to be aggressive  Enel is a more structured and complex company but probably more oriented towards long term value creation at Endesa. Additionally, while Enel is the largest shareholder, it is the junior partner in terms of control, which could also accentuate the friction

23 Early Break-up of the Acciona put on Endesa

 On 20 February 2009, Enel announced that it had reached an agreement with Acciona for an early break up of the Endesa put (equivalent to 25.01% of the company) for a total consideration of €11.1bn (the “Transaction”). Following completion, Enel would control 92.06% of Endesa, with the remaining 7.94% being free float

 The (“EC”) granted Enel clearance, on 8 April 2009, to the acquisition of sole control of Endesa (CNMV declared no squeeze out required)

 Key terms of the Transaction are as follows:

The total consideration of €11.1bn is equivalent to €42.0 per Endesa share, in line with the put option agreement exercisable from March 2010, and representing a 143% premium on Endesa’s current share price of €17.9 as of 26 May 2009

€1.5bn of the cash price would be represented by the extraordinary dividend, which Endesa has distributed in March 2009 (the amount of the total extraordinary dividend distributed by Endesa is equal to €6.2bn)

In the context of the Transaction, Enel would also transfer €2.9bn worth of renewable and hydro assets from Endesa to Acciona

The remaining consideration to be paid by Enel, after dividends and asset transfer, would be €6.7bn

The Transaction has been financed through a syndicated loan of €8.0bn agreed with a pool of 12 banks, of which €5.5bn due in 2014 and €2.5bn due in 2016 24

Enel Acquisition of Endesa

Strategic Rationale

25 The Combined Enel + Endesa Western LatAm Europe CEEMEA Installed Capacity (GW) 15.3 62.9 7.8 Leader in Energy Markets Customers (m) 11.2 46.9 1.4 Distribution (‘000 km) 1,390 68 No.1 in Italy

No.1 in Spain

No.1 in Romania and Slovakia

No.1 in Europe

No.1 in

No.1 in Latin Renewables Enel Endesa

 Creation of a global energy player with a leading position in diverse, high growth markets (, Eastern Europe, Creation of a Global Energy LatAm) Leader  Integrated player with a balanced and efficient generation portfolio and more than 60m customers

Creation of a Worldwide  Combination of Acciona and Endesa’s renewables assets under a new company Leader in Renewables  Presence in 24 countries and expected generation capacity of 13.31GW by 2009

 Value accretive from year one Enhancement of Stakeholders’ Value  Increased capacity to fund investments in distribution and generation would result in improved quality and security of services to customers 26 Endesa Leading Position in High Growth Markets

27 Source: Company Information Synergies by Category

28 Source: Company Information Notes: (1) Over 2006 total cost base, excluding Europe. Annual Savings of €680m by 2012

29 Source: Company Information Notes: (1) It only refers to fuel procurement. Synergy Levers

30 Source: Company Information New Business Mix(1) – 2006 proforma EBITDA Contribution

31 Source: Company Information Notes: (1) Considering 67.05% stake of Endesa and 100% OGK-5; excluding contribution from Services and Other. New Fuel Mix(1)

32 Source: Company Information Notes: (1) Based on FY06 production. Enel Acquisition of Endesa

Financial Impact on Enel Accounts

33 €35bn Credit Facility Agreement

34 Source: Company Information Capital Structure Evolution

7.3x 60.5% 0.1x

6.6x 6.4x 1.5x 6.2x 48.8% 48.8% 0.6x 48.8% 47.6% 0.9x 5.6x 1.1x 5.7x 0.2x 5.2x 1.2x 1.0x 1.0x

4.0x 3.1x 3.0x

5.7x 20.2% 2.7x 2.5x 18.2%

4.4x

2.4x 2.0x 2.1x 1.7x 1.8x

2006A 2007A 2008A 2009A 2010A 2011A 2012A

Mkt Cap / EBITDA Net debt / EBITDA Other adjustements / EBITDA Net Debt / EV (%)

35 Source: Company Information, Factset. Enel Acquisition of Endesa

Focus on Equity Swap Contracts

36 General Description of a Total Return Swap (“TRS”) The most simple way to consider a TRS (or CFD) is that the buyer of the TRS (the client) is fully exposed to changes in value of the underlying asset without physical ownership. Can be Cash- or Physically-Settled

 A TRS is a derivative instrument that allows the buyer (the Equity Amount Receiver) to receive from the seller (the Equity Amount Payer) the appreciation compared to the initial price or pay the depreciation in the share price of the underlying stock (the Equity Amount)

 At maturity or upon early unwind, the transaction can be

 Physically-settled (in which case the buyer buys shares from the seller at the initial price)

 Cash-settled

 During the life of the transaction, the buyer pays interest plus a spread and receives payments equal to the dividends paid by the underlying stock

 In order to mitigate the credit risk taken by the seller, the buyer would usually post cash collateral up-front corresponding to a percentage of the notional amount, and margin calls in case the share price decreases

 In order to hedge itself, the bank would usually purchase shares in the market. The price per share achieved by the bank for the execution of its hedge would be the Initial Price of the TRS Underlying price

Client receives increase in value Increase in above initial price at maturity underlying value

Initial price

Decrease in Client pays decrease in value underlying value below initial price at maturity

Time 37 Maturity Cash Flows in a Total Return Swap Flows During the Trade Initial Price = 100 During Cash collateral

Dividends Swap agreement Client Bank Client Bank Interest Initial price = Purchase of hedge 100 Market

Physically-settled Return of cash collateral

Shares Client Bank 100

Cash-settled Final Price = 150 Final Price = 70 Return of cash collateral Return of cash collateral

50 30 Client Bank Client Bank

150 Sell hedge at 150 70 Sell hedge at 70 150 70 Market Market Shares Shares

38 Total Return Equity Swap (TRS)/Contract For Difference (CFD)

Does Do Does Not do

▲ A TRS gives the purchaser economic exposure to ▼ A TRS/CFD does not mean that the purchaser has an underlying asset (e.g. shares) bought the underlying asset, only exposure to changes in its economic value ▲ A TRS with physical settlement agreed upon signing gives the purchaser the right to buy shares ▼ A TRS/CFD with cash settlement agreed upon at maturity signing does not give the purchaser the right to buy shares. Only cash, based on the performance ▲ When entering into a TRS/CFD, the bank may of the stock, is exchanged at maturity decide to hedge itself by buying the underlying asset ▼ The bank does not buy the underlying asset on behalf of the purchaser of the TRS ▲ If the bank decides to hedge itself and buy shares, this is completely independent in the way it ▼ The purchaser cannot in any way influence the manages the hedge and how any voting rights in bank’s hedging strategy and voting decisions relation to the hedge are voted ▼ A TRS/CFD does not exist to “buy shares avoiding ▲ In certain jurisdictions there is no requirement to disclosure” publicly disclose cash settled TRS/CFD

39 Example of the Use of Equity Swaps in an M&A Context

Structure Context Example Long Cash Settled  Obtaining leverage economic exposure with limited or no public  Porsche on Volkswagen Total Return Equity knowledge  Schaeffler on Swap Continental

Long Total Equity  Acquirer needs regulatory approval (competition authority, local  Enel/Endesa Return Swap (Cash regulator, HSR…) before making any acquisition  Lagardère on or Physically  Delay creates a disadvantage for client Universal Publishing Settled)  Acquirer can enter into a cash or physically settled swap, where  AEM on shares acquirer has the option to physically settle the swap if approval has been granted  If regulatory approval is received, swap will be physically settled and if not, swap will be cash settled and shares placed in the market or to a new buyer

Sale Plus  In situations where counterparty is forced to divest its stake (e.g.  Vivendi on BSkyB Long Total Equity commitment to competition authorities following M&A acquisition),  EDP on Optimus Return Swap it can retain economic exposure by selling the shares to the bank and entering into a Long Total Return Swap  Counterparty loses voting rights and legal ownership  Transaction is cash settled, unless counterparty can buy back the shares

40 Enel/Endesa – €2.9bn Total Return Swap On 1 March 2007 Enel entered into an equity swap with over 7% of Endesa (worth €2.9bn). Enel achieved 24.97% (€10.3bn) of economic exposure to Endesa in two trading days.

Building a 24.97% Stake (worth €10.3bn) in Endesa Total Return Swap Flows  Direct acquisition of 9.99% of Endesa SA ("Endesa") for a total consideration of Tender of Endesa shares worth €2.9bn approx. €4.1bn  Execution of a Total Return Equity swap on a further 15% of Endesa allowed Enel Tender 74.1m shares to build the 24.97% stake Market Bank  Any purchase of more than 10% of Endesa requires prior approval from the CNE Purchase price of €39/share that could take 1–2 months  As the bank was subject to the same restrictions on size, the swap had to be structured with two counterparty banks Long Total Return Swap  The swap allowed Enel to get additional exposure on 15% of Endesa while Appreciation + dividends waiting for approval from the CNE Enel Bank  Bank #1 acted as broker in the acquisition of 7.98% of Endesa's share capital Depreciation + Interests (equal to €3.3bn), underlying the swap agreements between Enel and the other bank

At Maturity (Assuming Share Price @ €40)

Process Overview Cash settlement of swap Enel Bank

Equity Amount Payer Bank approve Increase in share price CNE does does CNE

Equity Amount not Enel SpA Sale of receiver shares at €40 Number of Shares 74.1m Notional €39.0 Market/ Third Party Interest 3 months, with option to extend for 3 years

Settlement  In cash (by default) Sale of shares worth €40  Option for Enel to elect for physical settlement if Enel Bank CNE granted approval for the transaction CNE approves €39/share in cash

41