Spanish energy group Gas Natural Fenosa has reached an agreement with the controlling families of the Compañía General de Electricidad (CGE), one of the largest electricity and gas distribution companies in Chile, for the acquisition of a 54.19% stake in the company and will launch a takeover bid for the remaining stakes in the company. The takeover is expected to be completed by 28 November 2014. Gas Natural Fenosa will pay ChPE 4,700 per share (US$7.95/share) for the acquisition of 54.19%. The full acquisition of 100% of CGE is estimated at €2.6bn (US$3.3bn).
CGE is the parent company of distribution companies Emel Norte (Emelari, Eliqsa, Elecda), CONAFE (Emelat, Enelsa), CGE Distribucion (Emelectric, Emetal) and Edelmag, accounting for a total of 40% of the electricity distribution in Chile (in terms of volume) with sales of 13 TWh. The group is also a large electricity transmission company through its stakes in Transnet (SIC), Transemel (SING) and Edelmag (Magallanes). CGE is active in gas distribution, through Gasco Magallanes, Metrogas (main gas distribution company in the country with 80% of gas customers, mainly in Santiago), Gas Sur, and Innergy Holdings; the group has stakes in Gasoducto del Pacifico and in Gasoducto Gasandes through Metrogas. CGE is also active in Argentina : in electricity distribution through Energía San Juan, EDET, EJESA and EJESDSA (more than 855,000 customers) and in gas supply through Gasco.
This acquisition is part of Gas Natural Fenosa's expansion plans in Latin America, with a special focus on Chile, a leading economy in the region. It will strengthen the group's leadership in gas distribution in major Latin America cities and boost its electricity distribution activities. It will increase the share of Latin America in the group's EBITDA from 26% to 35% and improve the group's risk profile.
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