LISBON (Reuters) - A $10 billion bid by China Three Gorges for EDP-Energias de Portugal (EDP.LS) will run into next year because of the regulatory hurdles still to be cleared, the Portuguese power utility’s chief executive said on Monday.
Antonio Mexia was speaking ahead of a visit starting on Tuesday by Chinese President Xi Jinping, which the EDP CEO said would not alter the timeframe for the 9 billion euro ($10.20 billion) offer made in June by state-owned CTG.
“It’s an inevitably long process because there are many countries, many authorizations involved, especially in the United States and Europe. So it (any result of the offer) will be some time in 2019, certainly,” Mexia told reporters.
Xi will meet Portugal’s president and prime minister as he seeks to strengthen relations with the European Union country which Beijing has identified as an important location in its road and belt initiative.
CTG already is the largest shareholder in EDP, with a 23 percent stake. Chinese companies own large stakes in other Portuguese businesses, including banks and insurance firms.
Mexia, who spoke during a conference on business with China, added that some regulatory filings in Europe and the United States still remained to be made.
EDP’s board has rejected the 3.26 euros a share offer by CTG as too low, as did the board of its wind energy unit EDP Renovaveis, which has said that a takeover by a Chinese company could seriously affect its strategy in the United States.
Soon after making its offer, CTG held talks with European utilities to gauge their interest in buying EDP’s and EDPR’s U.S. renewables business to preempt any objections from U.S. authorities, sources familiar with the situation have said.
The offer could also run into regulatory obstacles in Europe because the Chinese state already owns a large stake in Portugal’s power grid operator REN (RENE.LS), which could put it in breach of EU rules.
Reporting by Sergio Goncalves, writing by Andrei Khalip, editing by Axel Bugge and Alexander Smith