Neoenergia closes merger with Iberdrola's Elektro unit
Bilbao-based utility Iberdrola has completed the merger of Brazilian unit Elektro Holding with Neoenergia, following approval from Brazil’s energy regulator Aneel, antitrust watchdog Cade and development bank BNDES. The deal leaves Iberdrola with a controlling 52.45% stake in the newly enlarged Neoenergia, which will be Brazil's largest electricity utility by number of customers. The Spanish firm has pledged to channel all its investments in Brazil through Neoenergia, and is set to list the company on the stock exchange.
Spanish energy group Iberdrola (BME:IBE) announced today the closing of the merger of its Brazilian unit Elektro Holding SA with Neoenergia SA, thus creating a company with a substantial renewable energy portfolio.

The completion comes after the deal was approved by Brazil’s energy regulator Aneel and antitrust watchdog Cade, as well as by the country’s development bank BNDES. Iberdrola now holds a 52.45% interest in the enlarged Neoenergia, while pension fund Previ and Banco do Brasil SA holds stakes of 38.21% and 9.35%, respectively.

The move brings together Neoenergia and Elektro's electricity distribution, transmission, generation and retail assets and services. Iberdrola described the transaction as “one of the most important corporate operations ever”. The Spanish group has pledged to channel all its investments in Brazil through Neoenergia. In addition, it has committed to list the new company on the stock exchange.

The enlarged Neoenergia, now being Brazil’s largest electricity utility by number of customers according to Iberdrola, will serve an area with a population of over 34 million people. The company will be active in the wind power segment through Forca Eolica do Brasil. Its total wind and hydropower capacity, either in operation or under construction, total 3,546 MW. The company also has 530 MW of thermoelectric generation capacity.

Neoenergia regulated asset base amounts to BRL 14 billion (USD 4.45bn/EUR 3.77bn). Taking into consideration Elektro’s figures, the larger company’s 2016 earnings before interest, tax, depreciation and amortisation (EBITDA) would have been BRL 3.6 billion, with a revenue of BRL 30 billion, Iberdrola said.

Under a newly-signed agreement between the stockholders, Iberdrola has the right to appoint the majority of the members of the new company's board of directors.

(BRL 1.0 = USD 0.318/EUR 0.269)

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