Neoenergia-Elektro merger in Brazil to close in Aug

Wind farm in Brazil. Author: Otávio Nogueira. License: Creative Commons, Attribution 2.0 Generic

July 20 (Renewables Now) - Spanish energy group Iberdrola (BME:IBE) expects to close the merger of its Brazilian subsidiary Elektro Holding SA with Neoenergia SA next month, creating a larger Latin American utility focused on networks and renewables.

The transaction is still pending clearance from the National Energy Agency (ANEEL) and the National Bank for Economic and Social Development (BNDES), Iberdrola said today in a statement announcing its first-half results.

Prior to the planned combination, Iberdrola holds a 99.99% stake in Elektro and a 39% interest in Neoenergia. It signed the merger deal with Neoenergia’s other shareholders, namely Banco do Brasil SA and pension fund Previ, in June. Following the tie-up, Iberdrola will hold a 52.45% stake in the enlarged utility, while Banco do Brasil and Previ will own the rest.

The combined company will have 13.4 million supply points and around 3,500 MW of contracted and operating energy generation capacity, mostly from renewable sources.

On Tuesday, Neoenergia said it had not decided yet on whether to file for a listing. Three sources earlier told Reuters that the company was working on a dual initial public offering (IPO) in Sao Paulo and New York. It could value the firm at some BRL 35 billion (USD 11bn/EUR 9.6bn), the report says.

(BRL 1.0 = USD 0.318/EUR 0.275)

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