Eneva proposes business combination with AES Tietê

The electric Eneva sent the generator AES Tietê a proposal for a combination of business between the companies that would result in the creation of a "giant in the generation sector" in Brazil, the company controlled by the U.S. group AES said in a statement in this Monday (2). The transaction would be implemented through the incorporation of AES Tietê shares by Eneva, in a structure that would include the delivery of Eneva shares to AES Tietê shareholders and payment of a cash installment of R$ 2.75 billion. AES Tietê shareholders would receive in the deal a total of 91.9 million shares of Eneva, equivalent to 22.58% of the company's share capital, in relation to an exchange that according to the company represents a premium of 13.3% over the closing price of AES Tietê shares in the pre-offer trading session. This would be equivalent to 0.0461 common shares of Eneva for each common or preferred share of AES Tietê, or 0.2305 per unit of AES Tietê, plus cash resources. Eneva's shares closed at R$ 42.75 each on Friday, while AES Tietê's units closed at R$ 15.21 each. AES Tietê said it will analyze the offer "in detail, keeping the market informed of possible developments." Eneva said in a statement that the operation would create a company with a "solid portfolio of assets, complementary resources and potential to benefit from significant operational and financial synergies." Eneva has operations focused on natural gas thermal power plants, with a portfolio that totals 2.8 gigawatts in installed capacity, of which 78% are already operational, besides having its own areas of natural gas exploration. AES Tietê, on the other hand, operates mainly hydroelectric plants and more recently began to invest in expansion through wind and solar power plants. The company has 3.35 gigawatts of total installed capacity, with projects in implementation that will bring it to reach 3.9 gigawatts. "We understand that the combination of business and the union of the talents and strengths of Eneva and AES Tietê represent a unique opportunity for companies and their shareholders," he said. The proposed combination of the business will be valid for 60 days and is conditional on the non-occurrence of "relevant adverse changes in market conditions or in the companies' business", according to the document.