Chilean regulators approve $3bn Chinese takeover of Naturgy unit

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Chilean regulators approve $3bn Chinese takeover of Naturgy unit

On Wednesday, Chilean competition regulators had approved a $3 billion acquisition of Spanish energy and utility company Naturgy’s Chilean unit, Compania General de Electricidad (CGE), by China’s State Grid International Development, pointing towards another major Chinese investment into Latin America.

In point of fact, as the world’s second-largest economy appeared to have shored up investment drives in S. America, Chilean antitrust authority, ‘Fiscalia Nacional Economica’ (FNE) was quoted saying in a statement late in the day that it had unconditionally approved the takeover deal, adding that the latest Chinese takeover would not adversely impact competitions in power and utility sector in the country.

Besides, latest acquisition of Naturgy’s Chilean unit by the China’s state-owned electric utility corporation came against the backdrop of a Naturgy remark released on November 2020 that said the company had reached an accord to sell off a 96 per cent stake in its Chilean unit, CGE, to China’s State Grid for a stark upsum of €2.57 billion ($3 billion).

China’s State Grid takes over Spain’s Naturgy unit in Chile

In tandem, since Chile, a long and narrow country spanning across S. America’s western-most edge with more than 6,000 kilometres of Pacific Ocean coastline, widely hailed as the most prosperous LATAM economy which has been expected to grow by 3.1 per cent this year following a 6.0 per cent contraction in a pandemic-rampaged 2020, has been witnessing a meteoric upsurge in Chinese investments over recent years, China’s total investment in S.

America surged to a whopping $12.8 billion last year, up about 16.5 per cent compared to 2018. Besides, while Chile, the world’s largest copper producer, usually contemplates China as one of its key allies, Chinese investment alone had represented roughly a 7.5 per cent of entire Foreign Direct Investment (FDI) in Latin America in 2019.

Nevertheless, Naturgy’s Chilean unit, which usually focuses on transmission and distribution of electric power, holds rights to distribute electricity across eleven regions in the Andean country.