June 4, 2018 / 8:09 PM / in 21 days

Italy's Enel buys Brazil's Eletropaulo for $1.48 billion

SAO PAULO (Reuters) - Italy’s Enel SpA (ENEI.MI) acquired 73 percent of the shares of Brazilian power company Eletropaulo (ELPL3.SA) on Monday, paying about 5.55 billion reais ($1.48 billion) to become Brazil’s largest electricity distributor.

The offer on Monday, accepted by Eletropaulo shareholders, was a formality after Enel won a bidding war with Spain’s Iberdrola SA last week (IBE.MC) for Eletropaulo, Brazil’s largest power distribution company by revenue.

Enel paid 45.22 reais per share, according to local exchange B3, which oversaw the auction and final offer. It also pledged to make a capital injection of 1.5 billion reais in Eletropaulo.

With the deal, Enel overtakes CPFL Energia, which is controlled by China’s State Grid, to lead the Brazil market.

Enel’s client base in power distribution in Brazil will jump to 17 million from 7 million.

The company’s final price for the Brazilian company represents a 164 percent premium over the value of its shares in March, when the Italian firm first showed interest.

Besides Iberdrola, local company Energisa SA (ENGI11.SA) also contested the auction.

Reporting by Luciano Costa; Writing by Marcelo Teixeira; Editing by Jonathan Oatis and Peter Cooney

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