Votorantim Energia and CPPIB announce joint acquisition of controlling stake in Brazilian hydropower developer

Votorantim Energia and Canada Pension Plan Investment Board (CPPIB) have announced that a consortium formed by their joint venture has acquired a controlling stake in Brazilian hydro generation company Companhia Energética de São Paulo (CESP), acquiring 80.2% of its common shares and 13.7% of its class B preferred shares.

The consortium offered BRL14.60 (US$3.94) per common and class B preferred share for a 35.6% stake in the company’s total share capital, representing a BRL1.7 billion (US$459.1 million) investment by the joint venture partners. This investment is the result of an auction held by the State of São Paulo at the Brazilian Stock Exchange.   

The closing of the transaction, and subsequent transfer of control of CESP, is subject to customary regulatory approvals, including Agência Nacional de Energia Elétrica (ANEEL) and Conselho Administrativo de Defesa Econômica (CADE). 

Following the change of control, the consortium will launch a Mandatory Tender Offer for the remaining common and class B preferred shares of CESP, compliant with the terms outlined in the auction bidding documents, the company’s bylaws and the applicable regulation of the Brazilian Securities Exchange Commission, Comissão de Valores Mobiliarios.

Following the completion of the transaction, and as described in the auction bidding documents, CESP will be granted a new concession for the Porto Primavera Hydroelectric Power Plant for 30 years in exchange for a payment of BRL1.4 billion (US$378.1 million).