China State Grid Corp is in advanced negotiations to acquire control of Spanish group Abengoa, which will mean that once the contract is signed, it will become the fifth largest energy company in Brazil, the Brazilian press reported.
The value of the deal was not given but in 2011 Abengoa was valued at 50 billion reals, and in that year the Spanish group posted turnover of 18.4 billion reals, with the Brazilian market accounting for 20 percent of the total, behind Spain, which accounted for 32.8 percent.
In 2010, China State Grid Corp had already acquired a 25 percent stake in Abengoa’s two transmission lines in Brazil, which was the group’s first step in the Brazilian market.
At the same time the Chinese group also acquired another five transmission lines from a consortium made up of Cobra, Elecnor and Isolux Ingenieria, spending a total of 3.1 billion reals on that deal.
Abengoa later sold more assets to Cemig, an energy company based in the Brazilian state of Minas Gerais, but still controls almost 3,000 kilometres of power transmission lines in the country.
If it takes control of Abengoa, china State Grid Corp, via its subsidiary State Grid Brazil Holding, which is controlled by State Grid International Development Ltd, will have a total of 10,500 kilometres of transmission lines in Brazil. (macauhub)