Brazilian utility CPFL Energia buys AES Corp unit for $486 mln
SAO PAULO, June 16 (Reuters) - CPFL Energia SA, the largest private Brazilian utility, has agreed to buy a power distributor owned by AES Corp in southern Brazil for 1.7 billion reais ($486 million), the companies announced on Thursday in securities filings.
The acquisition of Porto Alegre-based AES Sul, which has around 1.3 million clients and 5.5 billion reais in annual revenue, will raise CPFL's distribution market share by just over one percentage point to 14.3 percent.
"The agreement to buy AES Sul strengthens our strategy to grow in distribution", CPFL Chief Executive Officer Wilson Ferreira Junior said in a statement.
CPFL, based in Campinas, has acquired three other distribution firms in the past decade.
The deal, which must be approved by Brazil's electricity regulator and antitrust authority, would mark the first strategic acquisition in the country's electricity sector for two years.
Utility companies suffered losses under the previous Workers Party government, which imposed a temporary cap on prices.
Shares of CPFL, which have risen 33 percent this year, were down 0.5 percent on São Paulo's stock exchange. AES Corp shares, which have fallen 18 percent this year, were down 1 percent on the New York Stock Exchange.
AES Corp, which operates in 17 countries, has been trying to divest some of its holdings in Brazil for some time and had included the plan to sell AES Sul in its 2016 guidance.
The company also owns AES Eletropaulo, the biggest electricity distributor in Brazil, and AES Tietê and AES Uruguaiana.
The investment bank unit of Itau Unibanco Holding SA advised AES Corp on the deal, while Citigroup was the advisor for CPFL. ($1 = 3.4986 Brazilian reais) (Reporting by Tatiana Bautzer; Editing by Daniel Flynn and Paul Simao)
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