The administrative council for economic regulation of Brazil has given the green light to the public tender offer from CTG to EDP, without "any restrictions".
The administrative council for economic regulation of Brazil (CADE) accepted, without any restrictions the takeover bid from China Three Gorges (CTG) to EDP. The Brazilian regulator for competitiveness was notified by the end of August, and it took CADE a few weeks to approve the operation “without any restrictions”.
“According to the information we gathered, particularly the low market share, we conclude that the operation will not alter the market structure in a significant way, in terms of distribution, transmission, generation and commercialization of the electricity we provide, considered all the possible scenarios. Therefore we recommend the approval of the takeover bid, without any restrictions”, the official statement on CADE’s website reads.
The Chinese have as such overcome the first of the 16 obstacles they have to face in order to be successful in the takeover bid operation.
In order for the PTO to be successful, the following should approve it: the European Commission (or the Portuguese Market Regulator), António Costa’s government, the energy regulators from Poland, France and Romania, alongside the port authorities from Gijón and Avilés, in Spain. Besides that, the Canadian authority’s approval is as well essential for CTG’s PTO.
It might be harder to attain the green light from the USA, where EDP, through its subsidiary EDPR, has a considerable amount of its wind power production located. The Chinese will therefore also require the endorsement of the North-American energy regulator and the investors’ committee of the USA. Additionally, Chinese investments are seen as a kick in the teeth for Donald Trump’s administration.
After the formalization of all the abovementioned approvals, CTG’s takeover bid will still have to go through the approval of its own country, China. The government fired the former chairman and the former CFO of CTG this month, and they are now giving more importance to the investments perpetrated by other government companies such as State Grid, which is a shareholder of REN. There is a high risk at the moment for the PTO to be withdrawn.