China's CTG Makes €9Bn Bid for Portugal's EDP
China Three Gorges late May 11 made a takeover bid for the remaining 76.73% of Portugal's main power group EDP (Energias de Portugal) worth just over €9 billion, or $10.8bn.
The state-owned Chinese power group first invested in EDP in 2012, and currently owns 23.27% of its share capital. As well as supplying power, EDP also markets gas in both Spain and Portugal.
CTG said its intention is for EDP to lead the operations and growth of CTG in Europe, the Americas and Portuguese-speaking countries. As well as being the leading utility and power producer in Portugal, EDP also has a significant presence in the Brazilian and Spanish energy markets and in US power generation.
CTG says its offer is conditional on securing at least 50%, plus one share, of EDP voting rights. The offer would require EU, Portuguese, US and Brazilian anti-trust and other approvals, plus a nod from Canada. The Chinese firm pledged it would maintain EDP's Lisbon listing and headquarters.
The €3.26 per EDP share offer price represents a premium of 10.8% above the average EDP price during the six months if dividends paid are included, and of a 17.8% if dividends are excluded.
EDP has 26,753 MW of installed power generation capacity. This generated 70 TWh of power in 2017, of which more than half -- wind (39%), hydro (16%) and nuclear (2%) -- was non-fossil fuel, with the remainder fuelled from coal 31% and gas 11%. It was also a leading power distributor in Iberia and Brazil, having divested its Iberian gas distribution activities. It also sold 18.9 TWh (1.75bn m3) of gas in Iberia.
CTG at end-2016 had consolidated installed capacity of some 70,000 MW. Including minority-equity capacity, plus some plants just commissioned or still under construction, that figure reached 118 GW. Renewable clean energy accounted for 97% of its total mix, while its hydropower capacity accounted for 16% of the total installed capacity of hydro in China.