May 29, 2012 / 8:53 AM / 8 years ago

China's State Grid to buy Brazil assets from Spain's ACS

HONG KONG (Reuters) - State Grid Corp of China STGRD.UL said on Tuesday that it has agreed to buy electricity transmission assets in Brazil from Spain’s Actividades de Construcción y Servicios SA (ACS.MC) (ACS) for $531 million and assume debt of $411 million, the latest in a series of overseas acquisitions by Chinese power companies.

State Grid Corp’s wholly-owned subsidiary State Grid International Development Ltd will take over seven high-voltage electricity transmission assets in Brazil from ACS, it said in a statement via Bank of America Merrill Lynch (BAC.N), which acted as exclusive financial advisor to State Grid on the deal.

China’s cashed up state power groups have been scooping up bargains, with dominant power distributor State Grid establishing a presence in the Philippines, Brazil and Portugal.

The latest transaction will be State Grid’s second investment in Brazil and fourth major investment outside of China, the statement said.

State Grid signed a deal early this year to buy a 25 percent stake in Portuguese power grid operator Redes Energeticas Nacionais SGPS SA (REN) (RENE.LS) for about $508 million. In December 2010, it bought seven Brazilian power transmission concessions with investments totaling nearly $1 billion.

In January 2009, a consortium led by State Grid took over operation of the Philippine power grid after winning an auction for a 25-year operating license for $3.95 billion.

With a total length of approximately 2,792 km, the seven electricity transmission assets bought by State Grid from ACS span eight states in Brazil, the statement said. 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.

ACS was advised by Mediobanca on the transaction, the statement said.

Editing by Chris Lewis

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