IBERDROLA, Spain’s biggest power utility, said yesterday that its €1.78bn (£1.51bn) acquisition of Brazilian energy distributor Elektro should boost profit from day one.
Iberdrola has long been looking to expand its operations in Latin America where economic growth contrasts with stagnation in its home market.
Iberdrola already ranks as one of the largest power producers in Mexico and has a 39 per cent stake in Neoenergia, the largest power distibutor in northeastern Brazil, whereas Elektro serves several municipalities in the southeastern state of Sao Paolo, the country’s most populous and wealthiest region.
The Spanish company is buying 99.68 per cent of Elektro’s capital from AEI, the investment vehicle controlled by British investment manager Ashmore Group, which took over a number of Enron’s former power and gas businesses in Latin America.
Iberdrola said the Elektro purchase would be paid for with cash raised from debt or asset sales, “underlining Iberdrola’s financial strength and liquidity”.