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Power Giant AES Buys Brazil’s Tiete

October 27, 1999

SAO PAULO, Brazil (AP) _ Global power giant AES Corp. on Wednesday bought a controlling stake in Brazilian energy company Tiete for $470 million.

AES, based in Arlington, Va., bid 30 percent more than the minimum asking price for Tiete, which can produce 2,600 megawatts of energy and serves Brazil’s most heavily industrialized state, Sao Paulo.

Analysts originally had predicted a much higher selling price, but many potential bidders dropped out because of recent legal problems involving the privatization of the Cemig power company in the neighboring state of Minas Gerais.

Minas Gerais had sold a 30 percent stake in Cemig to private shareholders, including AES, Southern Co. and the Brazilian bank Opportunity. But the current governor wants to bring Cemig back under full state control and is trying to restrict the power of minority shareholders.

Tiete was the second of three Sao Paulo generators to be privatized. The third one, Cesp Parana, is to be sold in the first quarter of next year.

AES owns power-generating plants around the world and sells wholesale power in bulk.

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