Brazilian energy group Auren Energia SA has entered into a merger agreement with AES Brasil Energia SA, a move set to establish a robust platform boasting 8.8 gigawatts (GW) of renewable energy assets, the companies revealed on Wednesday.
As part of the merger, The AES Corporation will divest its 47.3% equity stake in AES Brasil to Auren for approximately USD 640 million (EUR 588.3 million), announced the US company in a separate statement.
According to a filing with the bourse by Auren, the company aims to integrate AES Brasil and operate it as a wholly-owned subsidiary. Shareholders of AES Brasil will have the option to choose from three payment methods for their shares, based on an overall exchange ratio of 0.76 Auren shares for each AES Brasil share. Opting for 100% cash will value AES Brasil's shares at BRL 11.55 each.
The completion of AES' divestment in the Brazilian business is anticipated within four to six months and is contingent upon the finalization of a construction project in its late stages.
Andres Gluski, President and CEO of AES, remarked, “With this transaction, AES is continuing to simplify its portfolio, while meeting its strong balance sheet objectives.” He emphasized the company's strategic focus on investing in renewable energy supply for corporate clients in the US market and its utilities business.
AES Brasil currently holds a portfolio of 5.2 GW in renewable energy assets, predominantly comprising hydroelectric and wind power, with some solar installations. Meanwhile, Auren boasts ownership of 3.2 GW in operational wind, solar, and hydropower plants.
