Eletrobras privatization boosts M&As in Brazil's power sector

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Friday, February 9, 2018

Mergers and acquisitions (M&As) in the electric power sector in Brazil are heating up as state-run firm Eletrobras' privatization moves forward, a consultant told BNamericas.

"The electric power sector is one of the most 'heated' in the infrastructure sector and this is in part due to a window of opportunities opened by Eletrobras' privatization," Franceli Jodas (pictured), a partner at KPMG, said in an email interview.

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According to KPMG, M&As in the Brazilian energy sector rose 31% in 2017, totaling 16 operations where foreign companies acquired local firms.

A significant part of the operations consisted of funds and private groups expanding their capacity in renewable energy – mostly wind – in addition to acquisitions of Cemig's generating parks whose concession contracts expired.

Other highlights included strategic purchases of distribution assets, such as the one carried out by China's State Grid, which acquired local energy group CPFL, and Spain's Iberdrola which increased its interest in Neoenergia.

"We could say 2018 already is a busy year, above expectations, considering the regulated electric power sector and that we are close to general elections," Jodas remarked.