Enel shares are trading lower Thursday, despite news the Italian energy firm has made a winning final bid for Brazilian business, Eletropaulo. The company’s success means it has beat out competition from Spanish energy company, Iberdrola to win the deal.
The Italian utilities firm's winning bid gives Enel access to 24 cities in the Sao Paolo Metro area and will make it the largest utilities provider in Brazil.
By 1345 BST, Enel shares were 1.47% lower at €4.68. The stock has ben moving lower recently, as the Italian political situation remains uncertain.
Enel wins bidding war
Enel has been bidding against Iberdrola’s Brazilian unit for Eletropaulo. But, its final offer, made Wednesday, beat out the competition.
Enel said it will pay 45.22 Brazilian reais per share for the Brazilian utilities provider. That bid values Eletropaulo at 7,567 million Brazilian reais, or some €2.03 billion euros.
“This price is the highest among those announced in the ongoing competing offer process for Eletropaulo,” Enel said. “The Offer remains conditioned, amongst other things, upon the acquisition of a total number of shares representing more than 50% of the share capital of Eletropaulo.”
“The acquisition of Eletropaulo would add another 7 million customers to the large customer base of Enel in Brazil that would reach 17 million, thereby making Enel the largest operator in the Country and accelerating its growth trajectory in the world’s largest metropolitan areas,” Enel added.
Bidding war ends
The news that Enel is set to become the owner of the Eletropaulo comes after a two-month bidding war between the Italian energy firm and Iberdrola.
The process has ben far from friendly, with Iberdrola accusing Enel of unfair competition in a recent letter to the European Commission.
“It is critical that the European Commission… prevents any Member State from passing legislation, adopting policies and taking measures that favour state-controlled companies and … distort the level playing field,” Iberdrola wrote.