State Grid Corp of China to buy transmission assets in Brazil from ACS for $1 bn
29 May 2012
State Grid Corp of China (SGCC) has agreed to buy electricity transmission assets in Brazil from Spanish construction firm Actividades de Construcción y Servicios SA (ACS), for $1 billion, including debt.
The acquisition is SGCC's second investment in Brazil and its fourth major investment overseas.
In January 2011, SGCC, the world's largest utility, acquired seven power transmission companies in Brazil for $1.8 billion from Spanish groups Cobra, Elecnor, Isolux and Abengoa.
Under the SGCC-ACS deal, Beijing-based SGCC will pay $531 million in cash and assume debt of $411 million. The purchase involves seven high-voltage electricity transmission assets spanning eight states in Brazil, with a total length of about 2,792km.
A majority of the assets to be acquired are currently in operation, with the remainder expected to begin commercial operation by the end of this year, the company said in a statement.
ACS is one of the world's largest construction companies with an annual turnover of around €15 billion.
The Madrid-based company has recently been selling non-strategic assets in order to cut debts. The company has put its renewable energy assets, power transmission assets, desalination plants and several motorway assets on the block in order to raise around €3 billion this year.
SGCC is the world's largest utility company and was ranked as the eighth largest company on the Fortune 500 in 2010. It has more than one billion customers and more than 1.6 million employees.
In February it teamed up with Oman Oil Co to buy a 40 per cent interest in Portugal's national power and gas grid operator Redes Energeticas Nationais for €592 million ($778 million). (See: China, Oman acquire 40 % in Portuguese utility firm for $778 million)
