Barcelona-based Gas Natural Fenosa to make take-over of biggest energy distributor in Chile for €2.6 billion

Barcelona (ACN).- The energy company Gas Natural Fenosa, based in Barcelona, is to make its largest international take-over yet, in bid to buy 100% of capital shares of Chilean electricity and gas distribution company Compañía General de Electricidad (CGE). This is following an agreement with CGE's main shareholders of over their 54.19% control, by which the Catalan company would pay 4,700 Chilean pesos per share. The purchase would reach €2.6 billion. However, the total size of the operation, including the consolidated debt of GGE and its subsidiaries, is around €6 billion.  CGE provides electricity to 43% of the Chilean market and has over 2.5 million customers. According to the Vice President of Gas Natural Fenosa, Rafael Villaseca, taking into account this transcation, the Catalan company expects a gross operating profit (EBITDA) of more than €5 billion in 2015, €600 million of which would come from CGE. This will be a strategic deal for the Catalan multinational: CGE is main retailer of electricity and gas in Chile, while Gas Natural Fenosa is a global company present in 31 countries and in cities including Bogota, Buenos Aires, Mexico City and Rio de Janeiro. Therefore, with this operation, the Barcelona-based company strengthens its presence in Latin America.

Largest international take-over bid in Gas Natural Fenosa's history

The acquisition tender launched by the Gas Natural Fenosa was said by the company to be its "biggest international operation", as the €2.6 billion bid for CGE will give it access to 43% of the Chilean energy market and 2.5 million additional customers, further strengthening its position in Latin America. Furthermore CGE is the first high-voltage network operator in the South-American country, with over 3,400 km of lines, and it concentrates most of its activity in the gas and electricity sectors of Chile, Argentina and Colombia.

The deal, announced on Sunday, will allow Gas Natural Fenosa to purchase up to 100% CGE shares . Furthermore, the Catalan company has already ensured buying a 54.19% control from majority shareholders of the Chilean company, made up by Grupo Familia Marín, Grupo Almería, and Grupo Familia Pérez Cruz, through signing a purchase commitment contract.

Gas Natural Fenosa is a global energy company with headquarters in Barcelona, operations in over 31 countries and more than 20 million customers. It is the largest integrated gas and electricity company in Spain and Latin America. The company hopes to improve its 2013 results with a gross operating profit (EBITDA) of over €5,000 billion in 2015.

Business confidence in Gas Natural Fenosa expected to grow following take-over

According to the Catalan multinational's Vice President, Rafael Villaseca, trust in the gas company is expected to increase once the takeover of CGE is complete, as the Latin America country foresees a "growing demand" for natural gas and electricity. Should 2013 results be matched, the Catalan company expects a gross operating profit of over €5 billion next year, of which CGE will contribute around €600 million. These gains will allow the Catalan company to meet its future growth targets "without execution risk and with a low impact on the debt". Villaseca also emphasised that the company had sufficient liquidity to meet the acquisition, and highlighted the "substantial opportunities" it will open in the Latin American market.

November schedule                                                                             

According to the take-over schedule, the 30 day offer acceptance period will end on the 11^th of November, but could be extended 15 additional days. Gas Natural already ensured the control of 54.19% of the shares, following the agreement with the main shareholders, but it aims to purchase the 100% of the Chilean company. The results of the take-over should be announced on the 14^th of November and payments may be made from the 15^th until the deadline of the 28^th day of the same month.