* E.ON to pay 850 mln reais ($471 mln) for stake
* Companies will develop 20 GW of capacity in Brazil, Chile
* Move gives E.ON exposure to Latin America market
* E.ON shares down 0.5 percent, MPX down 3.3 percent
(Recasts, adds details from conference call, background)
By Christoph Steitz
FRANKFURT, Jan 11 E.ON said it
will buy a 10 percent stake in Brazil's MPX Energia,
only weeks after losing a bid for a stake in Portugal's EDP
, as the group struggles to tap new markets following
Germany's move to exit nuclear power.
E.ON will pay about 850 million reais ($471 million) for the
stake as part of a 1 billion reais capital increase at MPX. The
transaction is expected to close in the second quarter of 2012,
Both companies will develop 20 gigawatts (GW) of capacity in
Brazil and Chile in a 50-50 joint venture, which will also be
responsible for the thermal and renewable energy projects in
"For us it was the perfect marriage," Eike Batista, Brazil's
richest man and in control of MPX, told journalists during a
The move, flagged by Reuters on Tuesday, gives E.ON access
to Latin America's biggest economy where electricity demand is
growing at a rate of almost 5 percent a year, or 10 times faster
than in Germany.
Batista did not give a specific number for how much the
companies would invest to arrive at the 20 GW of capacity but
added as a rule of thumb 1 GW would translate into $2 billion.
"In the joint venture (however) it could be different," E.ON
Chief Executive Johannes Teyssen said, adding the aim was for
the joint venture to be profitable from the start.
"This is not a game changer. The business for new production
capacities in Brazil is heavily regulated, which means limited
upside or downside," WestLB analyst Peter Wirtz said.
"If it goes well, E.ON improves its risk-hedge. If it goes
badly (e.g. currency risks), I'm not quite sure how that can be
hedged," he said.
According to the United Nations' International Atomic Energy
Agency, total electricity consumption in emerging markets should
more than triple by 2030, rising to 43 percent of world demand
from 27 percent now.
German utilities, including E.ON and RWE, have
been looking for ways to balance out the decision by German
Chancellor Angela Merkel to scrap nuclear power production
permanently after last year's Fukushima crisis in Japan.
The company suffered a significant setback last month when
losing a bid for Portugal's stake in EDP to China Three Gorges,
a move which would have given it access to the Brazilian market.
Troubles in its home market will likely lead E.ON -- whose
shares were down 0.5 percent at 16.78 euros by 1411 GMT -- to
report for its business year 2011 its first annual net loss. MPX
shares, traded in Sao Paulo, fell by 3.3 percent to 47.40 reais
per share, dropping for a second day.
($1 = 1.8049 Brazilian reals)
(Additional reporting by Joshua Schneyer in Rio de Janeiro;
Editing by Jon Loades-Carter and Greg Mahlich)