China Three Gorges attempt to win control of EDP slows

Bloomberg

China Three Gorges Corp.’s pursuit of utility EDP-Energias de Portugal SA has slowed as the Chinese energy producer grapples with unexpected obstacles to creating a global renewable-energy powerhouse, people with knowledge of the matter said.
A sudden leadership change at Three Gorges, lingering regulatory and political concerns as well as pressure to raise the 9.1 billion-euro ($10.4 billion) offer have led the Chinese to reassess the merits and hurdles of the deal, said the people, who asked not to be identified because the deliberations are private.
While Three Gorges is still working on the bid to increase its 23 percent stake in the Portuguese power generator, the timeline to achieve regulatory approval in Europe and the US has slipped to early next year from the end of this year, two of the people said. A final decision on the bid — pursuing, increasing or abandoning the offer — won’t be made until there’s more clarity on the regulatory demands, the people said.
“China Three Gorges continues to progress with all regulatory filings, continuing to work with a full suite of advisers in discussions with the regulators in different jurisdictions, and in the fulfillment of all the prior conditions for the launching of the voluntary tender offers,” the company said in an emailed statement. “The current timings and calendar for such approvals is in line with other comparable transactions of this magnitude and complexity.”
The state-owned company is trying to execute the deal amid increased political and regulatory scrutiny of proposed Chinese takeovers in Europe and the US, including a Sino-American trade war.
Heightened concerns about national interests and the security of energy and technology-related assets globally has already slowed or dealt death blows to some proposed Chinese investments, including Germany’s decision in August to block such a takeover for the first time.
European officials may also raise concerns about China’s growing influence over Portugal’s power generator and grids, the people said. China State Grid Corp. already holds partial ownership of the operator of Portugal’s electricity and natural gas grids, REN-Redes Energeticas Nacionais SA.In addition, the
Chinese government suddenly replaced the Three Gorges chairman and another key executive in August with little explanation, the people said.