Aguas Andinas, a subsidiary of SUEZ, has agreed with Algonquin Power & Utilities Corp (APUC), a Canadian company dedicated to renewable energies and regulated utilities, to sell 100% of its stake in Empresa de Servicios Sanitarios de Los Lagos SA (ESSAL) as part of a takeover bid. APUC will thus acquire 53.51% of ESSAL for an estimated purchase price of US$92.3 million, the Canadian multinational announced in a statement last Friday. In addition, due to local regulation, a public offering process will also be launched for the remaining shares of ESSAL.
According to APUC's press release, this acquisition presents an opportunity to expand its regulated presence in an OECD country with one of the highest GDP growth rates and one of the lowest risks in Latin America. "The acquisition of ESSAL supports APUC's strategic growth program and broadens our regulated footprint into a historically stable and foreign investment-friendly OECD country with a strong regulatory framework," said Arun Banskota, Chief Executive Officer of APUC. "As APUC's first international water utility, ESSAL will benefit from our core competency of responsible utility ownership, as well as leverage our best practices of safety, operational excellence, and innovation. We are excited with this opportunity to serve the water needs of our Chilean customers."
APUC will acquire 53.51% of ESSAL for an estimated purchase price of $92.3 million
In addition, APUC is committed to maintaining local and experienced operational and management teams after the closing of the transaction and expects to continue to invest in the water system to improve operations, sharing best practices with its other utilities. "With this transaction, we strengthen our ability to make investments that climate change requires, which will also result in job creation and economic activity when the country needs it most," said Marta Colet, CEO of Aguas Andinas. "The Algonquin entry to the Chilean water utility market is a sign of how sound and attractive this sector is for international investors, an industry with important growth opportunities in which Aguas Andinas continues to be a major player."
According to information provided by SUEZ in a press release, this sale is in line with the SUEZ 2030 strategic plan, by which the Group is redirecting capital towards businesses that fit in with its selective growth strategy.
The transaction, subject to regulatory approvals, is expected to close in the fourth quarter of 2020.