Engie comments on rumored plan to acquire EDP Renováveis

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“Following recent speculation concerning an intention by Engie to launch a takeover bid over the shares issued by EDP Renováveis and upon request of the Portuguese market authority (CMVM), Engie clarifies that as one of the major European utility companies with worldwide operations, it is constantly assessing investment opportunities. That said, Engie has not taken any decision in relation to EDPR and currently is not preparing the launching of any takeover bid over shares issued by EDP Renováveis, S.A.”

With this short statement, the French energy giant has responded to an article published by Bloomberg, where it was reported that Engie had offered US$8.5 billion to acquire EDP Renováveis, the renewable energy arm of Portuguese power utility, EDP.

Plans for the acquisition of EDP Renováveis, and its parent company, by other international corporations, including China Three Gorges Corporation, which currently has a 21% stake in the company, and Spain’s Gas Natural, are already known.

As for CTG’s takeover bid, which was submitted by its European unit, China Three Gorges (Europe), S.A., the Portuguese utility said in mid-May that the price of €3.26 per share offered (which would have resulted in a US$10.8 billion bid, according to Reuters), was considered too low. “The price offered does not adequately reflect the value of EDP and that the implied offer premium is low considering what is customary for European utilities where the offeror has acquired control,” EDP said in a statement.

EDP Renováveis has been predominantly active as a wind and hydropower project developer over the past decades. It has recently announced, however, a stronger commitment in the solar sector, particularly as a constructor of hybrid wind-solar power plants. It also recently secured a contract to build 200 MW of PV in the United States.

The utility’s total installed generation capacity stood at around 26.8 GW as of the end of 2017. Of this capacity, 39% comes from wind power plants, while another 34% is represented by hydropower. Combined cycle gas turbine (CCGT) plants account for 14%, while coal has a share of around 12%. All other energy sources, including solar, still represent a minimal share of just 1%.