Two large Chinese energy groups, power transmission group State Grid and power generator Three Gorges Corp., have announced significant acquisitions in the Brazilian power sector.
China's State Grid International Development has reached an agreement with Brazilian industrial group Camargo Correa to acquire its 23% stake in CPFL, the largest private electricity group in Brazil, for R 5.85bn (US$1.8bn). State Grid will pay R25 for each of the 234 million CPFL shares held by Camargo Correa. Other shareholders have the option to outbid State Grid or to sell their shares to the Chinese group on equal terms. The transaction is subject to approval by Brazilian antitrust regulators.
CPFL already accounts for 13% of the national distribution market in Brazil, supplying power to 7.8 million customers in 571 municipalities in the states of São Paulo, Rio Grande do Sul, Parana and Minas Gerais through eight distribution company. The group is currently acquiring AES Sul, which would raise its market share in the distribution market to 14.3%, providing energy to 382 of the 497 municipalities of Rio Grande do Sul.
This announcement follows the acquisition of two concessions of large hydropower dams in Brazil by China's Three Gorges Corp. The group will pay R4.8bn (US$1.48bn) for the operation of the Jupiá and Ilha Solteira dams, with a combined capacity of 5 GW. Both dams were previously managed by the Brazilian utility Companhia Energética de Sao Paulo.
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