E.ON, MPX to build power plants in S. America

E.ON AG has agreed to acquire a minority stake in Brazilian power company MPX Energia S.A. in a deal that will see both companies jointly invest billions of euros in new power plants in South America. This agreement marks E.ON’s first investment in Brazil; peer companies including Spain’s Iberdrola SA (IBDRY) and France’s GDF Suez (GSZ.FR) have also announced recent transactions, in Brazil and China, respectively. In a joint statement, both companies said: “The partnership between MPX and E.ON aims to develop a total [power production] capacity of 20GW in Brazil and Chile, thus becoming the largest private energy company in Brazil.” As per the agreement, E.ON will acquire a 10% stake in MPX for approximately EUR 350 million. The shares will be purchased in a capital increase at MPX, through which the Brazilian company expects to raise a total of EUR 423 million. The transaction is expected to close in the second quarter of 2012.

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