Enel buys 70 percent of Eletropaulo by R $5.5 bi and becomes leader in power distribution in Brazil

The Italian Enel became leader in power distribution in Brazil to close the purchase of 73 percent of Eletropaulo by $5.552 billion. In all, 122.7 million shares were traded in takeover bid in auction held on Monday (4) on the stock exchange (B3). The price per share, R $45.22, was set on Wednesday (30). The FCC has 167.3 million shares outstanding. If all shareholders had opted to sell their papers to the Italian company, the cost of the operation would be R $7.56 billion. With the transaction, the Enel still undertook to do a capital increase in São Paulo at least R distributor $1.5 billion. To take control of Eletropaulo, the Italian company offered a value per share greater than that proposed by Neoenergia (R $39.53). Scale and gain market leadership with the purchase of control of Eletropaulo, Enel becomes leader in power distribution and adds 7 million consumers Enel customers based in Brazil, which reaches 17 million, "accelerating your career growth in the largest metropolitan areas in the world ", as the company said in a statement. Before the negotiations, the leader in distribution of energy was occupied by CPFL Energia, of China State Grid. The fight by the Distributor, responsible for bringing energy to Sao Paulo and other cities in the metropolitan region, 23 was fierce, with the interference of authorities in the negotiation and public criticism among the possible buyers. The great interest in the transaction was due to the possibility of controlling the company, until then sprayed, capital and operating advantages due to the size, the region fueled and consumer profile answered for her, experts heard by the G1. Before the auction, most of the papers (49.58%) of Eletropaulo was in the hands of small investors and could travel on the bag. His biggest individual shareholders were the shares of Banco Nacional de Desenvolvimento Social (BNDESPar) and the AES group, with 18.73% and 16.84%, respectively. The Federal Government had other 7.97%, qualified investors had other 5.05% and 1.83% were in the company's Treasury. Since the offers by the company began in March to the definition of the purchaser, the company's market value has increased from about $3 billion to R R $5.5 billion, according to Economatica data. To fight the Fcc began in March, when the brazilian Energisa made an offer of R $19.38 for each share of the company. The onslaught came after a proposal of Italian Enel to buy the American AES participation in business, of unknown value. After that, Neoenergia group Spanish Iberdrola, also entered the competition and went on to fight with Enel about lance the lance. On aggressive pricing by rivals Energisa data just giving up and removed your offer. Neoenergia even close a deal to stay with new shares that would be issued by the Fcc, but the issue of the paper was suspended before the Enel proposal. Without giving up, the Spanish asked for arbitration in the Brazilian market for the cancellation. In the middle of the process, Neoenergia even close a deal to stay with new shares that would be issued by the Fcc, but the issue of the paper was suspended before the Enel proposal. Without giving up, the Spanish asked for arbitration in the Brazilian market for the cancellation. The duel between the two companies has reached even the European Union authorities. Neoenergia claimed that the rival would have advantage in business for State control and the Enel defended himself saying the charges lacked substance and aimed to disrupt fair competition. The dispute also generated public criticism among companies. Enel bought ads in newspapers to question a previous agreement signed between the company and Neoenergia, while the President of Neoenergia, Mario Ruiz-Tagle, yet said in an interview with Reuters that Brazil must be careful not to end up with your industry Electric dominated by "foreign State". But last week, in an interview with CNBC television network, the Chairman of Enel, Francesco Starace, placed hot cloths on the rivalry and said he was surprised by the "aggression" involved in the competition.