SGID Completes Equity Investment in CGE

On July 26 local time in Chile, SGID completed its equity investment in Companía General de Electricidad S.A. (CGE) and took over the company's operations. SGID launched CGE's mandatory tender offer (MTO) from June 22 to July 22, and acquired 97.145 percent of CGE's stake, 96.04 percent from Naturgy Energy Group in Spain and 1.1 percent from the stock market. The close of the transaction marked SGID's another success in investing in Chile, the highest ranked country in Latin America for creditworthiness.

Since the Share Purchase Agreement was signed on November 13 of 2020, the SGID team has made all-out efforts to close the transaction despite challenges from COVID-19. They obtained approvals from Chinese authorities, properly handled complaints from the Organization of Consumers and Users of Chile (ODECU), and were granted unconditional approval from the Chilean anti-trust body FNE. All these milestones laid a solid foundation for the final close of the transaction.

As the largest power distribution company and the second largest transmission company in Chile, CGE operates 3,647 kilometers of transmission lines, 65,000 kilometers of distribution lines, and serves three million customers in 14 of Chile's 16 regions. As CGE's service area is adjacent to that of Chilquinta Energía, the two companies are expected to forge a strong synergy. After taking over CGE, SGID runs two network companies in Chile and assumes a more important role in the host country's power infrastructure sector. The latest transaction consolidated SGID's standing in Latin America and contributed to its vision of building a world-leading enterprise of energy interconnection with Chinese characteristics.

To enhance CGE's operation and asset value, SGID will leverage State Grid's strengths in creditworthiness, technology and management, and introduce know-how from the rest of its overseas affiliates. SGID is committed to enabling overseas business to contribute more to State Grid, to raise the parent company's international profile and add value to its brand.

SGID representatives closing the transaction via video conferencing included two corporate leaders Li Lequan and Liu Yanli, as well as an Assistant President, the General Counsel, leaders of the CGE executive team, and personnel from the Department of Business Development & Strategy, the Department of Finance, the Department of Legal Affairs, and the Department of Investment & Financing (Capital Management Center).