Brazil’s Administrative Council for Economic Defence (CADE) has unreservedly approved the potential takeover of the EDP – Energias de Portugal group by state-owned China Three Gorges, according to a dispatch issued on Monday.
“The transaction … consists of the acquisition by CTG Europe of the control of the EDP Group, to be carried out through a takeover bid,” CADE wrote, adding that CTG Europe intends to hold at least 50% of the voting capital of the EDP Group.
The Chinese state-owned group owns 23.27% of the capital of the EDP group through its subsidiary CTG Europe.
The Brazilian agency called for the approval of the deal because it understood that the operation between the companies would be “incapable of significantly altering the structure of the electricity generation, transmission, distribution and sale markets in all scenarios considered.”
CADE is one of the two Brazilian regulators that had to issue an opinion on the operation, the other being the National Electric Energy Agency (ANEEL).
For the bid to proceed, CTG needs the authorisation of at least 18 entities from eight countries, with US regulators, namely the Committee on Foreign Investment in the United States (CFIUS) and the Federal Energy Regulatory Commission (FERC), expected to be against the deal.
The United States ambassador to Portugal, George Glass, said earlier this month that his country would not accept CTG’s takeover bid for EDP with respect to assets in the US, where the Portuguese group is the third largest supplier of renewable energy, according to Portuguese news agency Lusa. (macauhub)