GEB, Red Eléctrica close Argo acquisition

GEB, Red Eléctrica close Argo acquisition

M&A Energy Electricity Brazil Colombia Europe Latin America

Colombia's Grupo Energía Bogotá (GEB) and Spain's Red Eléctrica have closed the acquisition of the Brazilian power transmission company Argo Energia for BRL3.36 billion ($671 million), according to a securities filing on Thursday.

GEB and Red Eléctrica acquired 361 million shares in Argo from the Brazilian investment management firm Pátria Investimentos, Singapore's sovereign wealth fund Temasek and a local investment fund called Argo FIP, Argo said in the filing.

Before the sale, Pátria owned 79% of Argo through the Pátria Infraestrutura III fund, while Temasek had 14% through its subsidiary Sommerville Investments and other shareholders had 7%, according to Argo.

Pátria agreed to the deal in November last year. Itaú BBA and Bank of America coordinated the sale. GEB and Red Eléctrica now each own half of Argo's common shares.

The acquisition is part of the "strategic growth plan" in Brazil of both GEB and Red Eléctrica, according to the securities filing. GEB has 51% of four transmission line concessions in Brazil through the subsidiary GEBBRAS. Red Eléctrica operates 3,000km of transmission lines in Chile and Peru.

Argo said in July last year that it could sell its power transmission lines with Red Eléctrica among the potential buyers. The other reported bidders included ISA from Colombia, a team with France's Engie and the Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) and another with Brookfield and Canada Pension Plan Investment Board (CPPIB).