China State Grid Taking Over Europe?
Following the acquisition of Portugal two years ago, after the grid operator of the shares, at the end of the State Grid Corporation of China (SGCC) has finalized the Italian grid shareholders shares trading, after the debt crisis in Europe to seize the energy companies and the privatization of state-owned assets shrink opportunities smoothly into the European conflict on foreign utility sector, an important step towards internationalization, and to change the role of strategic investors.
The past two years, the national grid through the acquisition of shares of the relevant operators to enter Portugal and Italy such mature markets in Europe and try to acquire the shares in Greece and Spain grid. Such as the successful completion of the following transactions, expanding the portfolio, National Grid will become the first major regional power grid assets owned utility companies, to achieve the desire to establish a regional grid within five years of the European governing body of the European Union.
2012, National Grid acquired Portuguese grid operator REN 25% of the shares on July 31 this year, also signed the acquisition of the Italian state-owned financial institution wholly owned subsidiary of CDP CDP RETI 35% stake in China’s largest investment finalized in Italy. CDP Reti owns 30% of the natural gas transport group Snam, and is about to get grid company Terna shares in the same proportion.
Reuters was informed by the sources, National Grid seeks 66% stake in the Greek bid grid operators ADMIE, also intends to bid for the German E.ON (E.ON) is located in the grid in northern Spain. The latter estimate could reach one billion euros.
Reuters reported that assessment, as the world’s largest in terms of revenue utility company, National Grid shots careful not to get involved in a hostile takeover, and seize the opportunity to southern eurozone countries funds raised will be brought privatization of state-owned assets.
The report that compared the West Infrastructure Fund and the European grid companies, National Grid has an advantage is that the lower rate of return requirements. CEO of consulting firm Accenture’s Resources Group Operations Group, Jean-Marc Ollagnier is that the EU open its doors to the national grid One reason is that companies often do not participate in this operation, only investments.
But National Grid is not satisfied with this passive investment, may presage will strengthen intervention. The Division is responsible person said recently:
We have to invest abroad, instead of doing public good, overseas investment is flexible configuration of both domestic and international resources to domestic and foreign mutual promotion and internationalization strategy is the company’s transformation of development mode of the inevitable choice.
National Grid’s overseas business is really small achievements. As of June this year, the Division actual foreign investment of its own funds invested nearly $ 3 billion, with total foreign equity investment in the project over 11 billion U.S. dollars, the size of the foreign assets of over 23 billion U.S. dollars.
2009-2013, National Grid profits overseas investment business grew from less than 800 million yuan to 3.2 billion yuan, an increase of 309%, return on investment is much higher than the national level.
National Grid A person familiar with the company’s overseas strategy executives also told Reuters that yields overseas projects is usually close to more than 10-10%, but only a few percent in the country.
By the end of May this year, Liu Zhenya, chairman of National Grid proposed Global Energy Internet development concept, in public speeches, that by UHV and smart grid technologies, build global energy Internet, to Asia, Europe, North America Transmission and promote global energy optimization.