CPFL Energia, a subsidiary of China State Grid, has won the privatisation of CEEE-T, the electric power transmission company of Rio Grande do Sul State, for 2,670 million reais (525 million dollars).
In an auction held on the Sao Paulo Stock Exchange, CPFL Energia acquired 66% of CEEE-T’s total share capital, offering 57% more than the minimum price required by the authorities.
The deal also attracted Brazilian companis Energisa and MEZ Energía, that bid less for CEEE-T.
CPFL Energia will take over control of the Rio Grande do Sul state company, which currently operates some 6,000 kilometers of transmission lines and 56 substations in the border region with Uruguay and Argentina.
“We are very happy with this acquisition. CPFL already has a long history of alliance with Rio Grande do Sul and now that association is increasing even more,” said CPFL president Gustavo Estrella, who also promised “a lot of investment.”
The operation must still be approved by the National Electric Power Agency (Aneel, the sector’s regulatory body) and the Administrative Council for Economic Defense, an agency that fights monopolies in Brazil.
The other remaining third of the shares of the transmission company belong to the state company Eletrobras, which will be able to exercise its right to “tag-along”, that is, to sell its participation under the same conditions.
Eletrobras, the largest company in the electricity sector in Latin America, is also in the process of privatization, after Congress approved last month a project to start a capitalization process for the company without the participation of the Brazilian state.