Subject: Iberdrola to Buy Brazilian Power Company for $2.4 Billion
From: "Joan Peugh" <[email-masked]>
To: "Eric Schwerin" <[email-masked]>, "Hunter Biden" <[email-masked]>
Date: Thu, 20 Jan 2011 09:53:38 -0500

January 20, 2011, *7:31 am* Mergers &
Acquisitions<http://dealbook.nytimes.com/category/main-topics/mergers-acquisitions/>
Iberdrola to Buy Brazilian Power Company for $2.4 BillionBy CHRIS V.
NICHOLSON <http://dealbook.nytimes.com/author/chris-v-nicholson/>

Iberdrola, the Spanish energy giant, said on
Thursday<http://www.iberdrola.es/webibd/corporativa/iberdrola?IDPAG=ENMODULOPRENSA&URLPAG=/gc/prod/en/comunicacion/notasprensa/110120_NP_01_Elektro.html>that
it had agreed to buy Elektro Eletricidade e Servicos of Brazil for
$2.4
billion.

Iberdrola, which already owns 39 percent of the Brazilian company
Neoenergia, will be one of the largest energy providers in the country. The
company said Brazil was “key to its international growth strategy.”

The cash offer to buy 99.7 percent of Elektro from Ashmore Energy
International must be approved by regulators. Iberdrola told the Spanish
market regulator that it hoped to close the deal within six months.

Iberdrola said consolidated pro forma net profit for Elektro and Neoenergia
amounted to 2.1 billion reals ($1.2 billion) in 2009. That year, Elektro
supplied 11,000 gigawatt hours of power to 2.17 million customers.

Neoenergia holds majority stakes in the Brazilian energy distributors
Cosern, Celpe and Coelba.

Ashmore, known as A.E.I., said on
Wednesday<http://files.shareholder.com/downloads/ABEA-31GB8A/1136206300x0x435951/685654a7-8529-48a3-a53d-425d5c0195cb/AEI_Sells_Operating_Companies_for_4_8_Billion.pdf>that
it had sold stakes and assets worth $4.8 billion.

“After A.E.I. withdrew its initial public offering in October 2009, the
company and its shareholders began evaluating strategic alternatives for the
business,” James Hughes, chief executive of Ashmore, said in the statement.
“We concluded that A.E.I. should sell the vast majority of its regulated
assets, return the capital to our shareholders and plan to reorganize the
company around a smaller business focused on power generation.”

The company said it had sold stakes in 10 companies to nine buyers,
divesting itself of 80 percent of its assets. That portfolio, in addition to
Elektro, included interests in energy companies in Colombia, Peru, Chile,
Panama, El Salvador, Argentina and Poland. The funds will be used to pay
debt and invest in its remaining operations, it said.

A.E.I. hired Goldman Sachs and Banco Itau as advisers.

Deal-making has been hot in the energy sector in the last year. In 2010,
merger and acquisitions in the sector amounted to $501 billion, up 42.8
percent from the previous year, according to Thomson Reuters.

*Joan K. Peugh*

*Rosemont Seneca Partners*

1010 Wisconsin Avenue, NW

Suite 705

Washington, DC 20007

T:(202) 333-1880

F: (202 333-1886

M: (202) 841-8543

[email-masked]