Energy conglomerates from China have gradually become the dominant force in Brazil’s electricity industry, news agency Reuters reported last week.
Chinese firms have been involved in three of the six largest electricity mergers to be announced in Brazil since the beginning of 2015, according to data compiled by Reuters. This includes the confirmation in July, by public sector power firm State Grid Corporation of China, that it was to purchase a 23.6-percent stake in Brazil’s CPFL Energia SA; for 5.9 billion reais (US$1.8 billion).
Brazil has become State Grid’s second-largest destination for merger and acquisition activity since 2010. The country accounts for 23 percent of the US$20.1 billion State Grid has spent on such deals, the report said. During the same period, the largest economy in Latin America also accounted for 15 percent of the US$27.8-billion merger and acquisition deals of another Chinese state-owned power firm, China Three Gorges Corporation.
“[In Brazil] There are multiple opportunities and potential purchases that we are analysing,” said Li Yinsheng, chief executive officer of the Brazilian unit of China Three Gorges, in comments to the news agency. “We want to become a relevant player.”