Brazil Electric Utilities Compete To Buy Ashmore Assets -Report
August 13 2010 - 10:58AM
Dow Jones News
Four Brazilian electric utilities are bidding to buy Ashmore
Energy International's assets in Brazil, worth as much as 7 billion
Brazilian reais ($3.95 billion), in a deal that could determine
market leadership in the country, Valor Economico newspaper
reported Friday.
The leading contenders to buy the generation and distribution
assets of Ashmore are state-controlled utility Companhia Energetica
de Minas Gerais or Cemig (CIG, CMIG4.BR); Neoenergia SA, controlled
by Spain's Iberdrola Energia SA; CPFL Energia SA (CPL, CPFE3.BR),
Brazil's biggest non-state utility; and AES Corp.'s (AES) Brazilian
units, Valor reported, without saying where it got the
information.
Successful bids by AES or CPFL would make the company the leader
in the distribution industry, Valor said.
The battle between CPFL and Neoenergia could decide the fate of
future mergers. CPFL was reportedly seeking to buy Neoenergia, but
should Neoenergia succeed in buying the Ashmore assets, it could
turn the tables on its rival or at least block expansion by CPFL,
Valor said. CPFL was negotiating to buy the assets last year but
Ashmore pulled out, Valor said.
AES, which controls energy distributor Eletropaulo, may surprise
investors and come away with the assets by offering to swap
Ashmore's Brazilian assets for a stake in the U.S. parent company,
Valor said.
Cemig seeks to enter the Sao Paulo market through the asset
purchase and may use a yet-to-be-created investment fund to finance
the purchase, Valor said.
-By Paulo Winterstein, Dow Jones Newswires; 55-11-3544-7073;
paulo.winterstein@dowjones.com