Banc Sabadell: The General Court of the European Union (EGC) has ruled that the tax relief of the corporate income tax deduction for goodwill generated by the indirect purchase of shareholdings in companies abroad, both in direct and indirect acquisitions, is lawful. Thus, the EGC rejects the EC’s arguments that they are unlawful state aid and incompatible with the internal market.
Assessment: Positive news, although with limited impact due to its amount. Iberdrola (IBE) estimates that it will recover ~€700 million euros (1% capitalisation, 1.6% DFN) corresponding to the bonuses from the acquisition of ScottishPower and Energy East. This amount is expected to be booked this year, although it will not go through P&L but through cash (currently booked under “Current tax assets”).
