China’s State Grid Corporation has proposed to purchase the stake it does not already own in Brazilian electricity company CPFL Energia after completing its acquisition of a controlling stake in the business last month.
State Grid, through its Brazilian unit, paid 17.36 billion reais ($5.59 billion; €5.27 billion) in January for a 54.64 percent stake in CPFL and its renewables subsidiary, CPFL Energias Renovaveis. Following the conclusion of the transaction, the state-owned company said it is planning to pay 25.5 Brazilian reais per share for the remaining float under a mandatory tender offer.
The new proposal, if successful, will see the Brazilian utility and its unit delist from the New York and Sao Paulo stock exchanges and become a wholly owned subsidiary of State Grid.
CPFL is the third-largest utility and the largest private one in Brazil, with a 14.3 percent market share. It operates assets across the power generation, transmission, trading and distribution sectors, mostly in the centre-south region of the country. Its renewables subsidiary has 1.9GW of installed generation capacity, with projects of about 3GW under development.
State Grid has recently been active in buying power businesses in the South American country. Since 2010, it has acquired a total of 14 power transmission lines in Brazil’s Sao Paulo and Rio de Janeiro states, in addition to a concession to build lines connecting the Belo Monte hydroelectric dam and the nation’s populous centre-south region.
As of July 2016, State Grid operated a transmission network of nearly 10,000km and had another 6,000km of lines under construction in the country.