Three Gorges to buy stake in Portuguese firmDecember 24th, 2011 - 4:02 pm ICT by IANS
Beijing, Dec 24 (IANS) China’s Three Gorges Corp will buy a 21 percent stake in Portuguese utility company EDP for 2.69 billion euros ($3.5 billion), beating rivals from Germany and Brazil, a media report said Saturday.
The acquisition will help the Chinese company, operator of the world’s largest hydropower project, to boost its presence in Europe, the US and Brazil, in line with its “go-out” strategy, Three Gorges chairman Cao Guangjing said.
Three Gorges’ bid was a 53.6 percent premium to the market price of EDP-Energias de Portugal SA Wednesday, said Portugal’s state holding company Parpublica.
Other bidders included Germany’s E.ON AG and Brazil’s Centrais Eletricas Brasileiras SA, People’s Daily reported.
Cao said the bidding process was “very intense” as Three Gorges’ price was only 5-6 percent higher than those of key rivals.
Under the deal, the total investment in EDP and the Portuguese economy may reach eight billion euros, taking into account financing by Chinese banks, said Maria Luis Albuquerque, Portugal’s treasury secretary.
The Portuguese government is selling stakes in EDP and grid operator REN as part of a 78-billion-euro bailout plan it agreed with the European Union and the International Monetary Fund. The sale of the EDP stake is the first and largest of that privatization plan.
Lisbon-based EDP has a strong presence in alternative energy such as hydro and wind. Its business in Brazil, a fast-growing market, has attracted strong interest from bidders. EDP is also the main shareholder of Macau power utility CEM.
Chinese companies are attracted to Portugal, which has centuries-old links with Brazil and resource-rich Africa. The Sinopec Group has agreed to buy 30 percent in the Brazilian unit of a Portuguese oil firm.
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Tags: alternative energy, bailout plan, brazilian unit, chinese banks, chinese companies, chinese company, company operator, edp, energias de portugal, hydropower project, international monetary fund, key rivals, oil firm, portuguese economy, portuguese government, privatization plan, sinopec, sinopec group, three gorges, treasury secretary