Brazil’s Watchdog Probes EDP Power Transmission Acquisition

Brazil’s competition regulator CADE has begun analyzing the acquisition by Portugal’s EDP of Mata Grande Transmissora de Energia (MGTE), a consortium formed by IG Distribuição e Transmissão de Energia and ESS Energias Renováveis, which acquired one lot at a power transmission auction in 2018. 

MGTE comprises one 230kV, 113km transmission line in Maranhão state. The project has already been granted an installation license and is expected to come online ahead of the scheduled September 2022 agreed with power regulator Aneel. 

Investment in the undertaking is put at 88.5 million reais (US$16.2 million), considering the acquisition, capex, and tax benefits. 

In a form submitted to CADE, the companies stated the operation represents an opportunity for EDP to expand in the northeast region’s transmission market and a good business opportunity for the IG group. 

Even though the transaction could result in a small horizontal overlap in the power transmission market and a potential vertical overlap between Mata Grande’s transmission and EDP’s generation operations, the firms claimed it would not generate competition concerns, considering their low shares in those markets.

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