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Three Gorges wins bidding war for Portugal EDP stake
By Richard Fu |
December 23, 2011, Friday
|
Online Edition
Online Edition
CHINA Three Gorges Corp has won a bid to buy a 21 percent stake in Portuguese utility EDP for 2.69 billion euros (US$3.5 billion), beating rivals from Germany and Brazil, as the southern European nation sells state assets to cut debt.
The acquisition will help the Chinese company, operator of the world's largest hydropower project, to boost its presence in Europe, the United States and Brazil, in line with its "going out" strategy, Three Gorges Chairman Cao Guangjing said in a statement.
Three Gorges' bid was a 53.6 percent premium on the Wednesday market price of EDP-Energias de Portugal SA, according to Portugal's state holding company Parpublica. Other bidders included Germany's E.ON AG and Brazil's Centrais Eletricas Brasileiras SA.
Cao said the bidding process was "very intense" as Three Gorges' price was only 5-6 percent higher than that of key rivals.
The Portuguese government is selling stakes in EDP and also grid operator REN as part of a 78 billion euro bailout plan agreement it entered into with the European Union and the International Monetary Fund.
The sale of the EDP stake is the first and largest of that privatization plan.
EDP, based in Lisbon, has a strong presence in alternative energy like hydro and wind. Especially, the company's business in Brazil, a fast-growing market, has attracted strong interest from bidders. EDP is also the main shareholder of Macau power utility CEM.
Three Gorges' investment shows a vote of confidence in Portugal, which has centuries-old links with Brazil and resource-rich Africa. State refiner Sinopec Group in November agreed to buy a 30 percent stake in the Brazilian unit of Portuguese oil company Galp Energia SGPS SA.
The acquisition will help the Chinese company, operator of the world's largest hydropower project, to boost its presence in Europe, the United States and Brazil, in line with its "going out" strategy, Three Gorges Chairman Cao Guangjing said in a statement.
Three Gorges' bid was a 53.6 percent premium on the Wednesday market price of EDP-Energias de Portugal SA, according to Portugal's state holding company Parpublica. Other bidders included Germany's E.ON AG and Brazil's Centrais Eletricas Brasileiras SA.
Cao said the bidding process was "very intense" as Three Gorges' price was only 5-6 percent higher than that of key rivals.
The Portuguese government is selling stakes in EDP and also grid operator REN as part of a 78 billion euro bailout plan agreement it entered into with the European Union and the International Monetary Fund.
The sale of the EDP stake is the first and largest of that privatization plan.
EDP, based in Lisbon, has a strong presence in alternative energy like hydro and wind. Especially, the company's business in Brazil, a fast-growing market, has attracted strong interest from bidders. EDP is also the main shareholder of Macau power utility CEM.
Three Gorges' investment shows a vote of confidence in Portugal, which has centuries-old links with Brazil and resource-rich Africa. State refiner Sinopec Group in November agreed to buy a 30 percent stake in the Brazilian unit of Portuguese oil company Galp Energia SGPS SA.
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