One of Germany's top business leaders said yesterday that he sees little chance of power companies making big cross-border deals this year because some European politicians are protecting their home markets.

Wulf Bernotat, the chief executive of E.ON, Germany's largest utility, attacked protectionist policies that are preventing his company from expanding into Spain.

In an interview with the Wall Street Journal, Bernotat reiterated E.ON's interest in Spanish energy companies like Iberdrola, the owner of ScottishPower, but noted the Bilbao-based group had built defences to fend off a takeover and the government in Madrid did not seem "too keen" to see the company fall into foreign hands.

"I would not necessarily expect a mega deal, but maybe some restructuring" in the Spanish energy market this year, he stated.

Industry sources have said E.ON could consider buying a stake in Iberdrola on its own or might seek the help of a joint bidder, probably a Spanish company such as the construction firm ACS, to pave the way for a deal, allowing it to buy certain assets but not others.

Such a strategy might also allow the group to avoid political opposition within Spain as well as from competition authorities.

Meanwhile, E.ON said full-year earnings before interest and taxes excluding one-time items may be at the "lower end" of the com- pany's target range because the purchase of power plant assets from Spanish electricity company Endesa took longer to complete than expected.

The company kept its forecast for an increase of between 5% and 10% for profit on this basis, chief financial officer Marcus Schenck said to journalists and analysts.

E.ON later said it had agreed to buy the Endesa power plants for 11.8bn (£9.3bn) after losing a battle to acquire the Spanish electricity generator last year.

E.ON will spend 8.9bn for the assets in Spain, France, Italy and Poland, and take over 2.9bn in debt, the Dusseldorf-based utility said. The deal is likely to close in the third quarter.