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German power giant E.ON expands in Brazil

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(Globalpost/GlobalPost)

E.ON, Germany's biggest power supplier, said Thursday it will increase its stake in Brazilian electricity producer MPX to just over 36 percent.

E.ON -- which already acquired an 11.7-percent stake in MPX, a unit of EBX, in April 2012 -- "and its Brazilian partner EBX have today agreed on the increase of E.ON's stake in MPX," the German company said in a statement.

"In the first step, E.ON will acquire 24.5 percent of MPX from EBX" and in a second step, MPX would undertake a capital increase to which E.ON would subscribe, the statement said.

The total investment for E.ON would amount to around 800 million euros ($1.0 billion).

"Today's announcement is a confirmation of E.ON's strategic belief in the growth opportunities the Brazilian market offers with its positive outlook on long term power demand and economic growth prospects," said E.ON chief executive Johannes Teyssen.

Separately, E.ON said it has agreed to sell its 100-percent stakes in two Hungarian gas subsidiaries E.ON Foldgaz Trade and E.ON Foldgaz Storage to MVM Hungarian Electricity Ltd for 870 million euros, including debt.

E.ON Foldgaz Trade is Hungary's largest gas supplier and has gas procurement contracts with domestic and foreign producers.

E.ON Foldgaz Storage has a storage capacity of 4.2 billion cubic meters, making it the country's largest provider of gas storage services.

The two companies are based in Budapest and together employ about 250 people, E.ON said.

"The sale of our gas companies in Hungary further sharpens the focus of our business in Europe. Through our E.ON Hungaria subsidiary we continue to supply energy to about 3 million customers in Hungary," said chief financial officer Marcus Schenck.

The transaction is subject to antitrust and regulatory approval and is expected to close in the second half of 2013.

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http://www.globalpost.com/dispatch/news/afp/130328/german-power-giant-eon-expands-brazil