Shareholders in Portugal’s biggest company, Energias de Portugal, on Wednesday (24 April) blocked a €9 billion takeover bid by the state-owned China Three Gorges (CTG) Corporation.
The rejection of the bid by the Chinese energy behemoth comes amid growing unease within the European Union over a surge of Chinese state investment in and around the bloc.
Energias de Portugal, an electricity company, said in a statement that the shareholders rejected the takeover because of a regulator requirement that their voting rights be modified.
The company had already said last year the the offer was too low.
“The shareholders decided not to approve the change in status of the company,” the EDP statement said.
However EDP’s chairman, Antonio Mexia, who served as public works minister 14 years ago, announced after the shareholders’ general assembly that “we are confident about the future of the company and our partnership with China Three Gorges.”
CTG had already said earlier this week that, whatever the outcome of the shareholders’ meeting, it would remain a “long term strategic investor” in EDP.
The voting rights reform had been demanded by the Portuguese stock exchange as a condition for its green light to the Chinese offer.
EDP’s current rules prevent any shareholder from having more than 25% of the voting rights, regardless of the size of its shareholding.
CTG is already the biggest EDP shareholder with 23.27% of its capital.
It launched its takeover bid in May 2018, offering €3.26 per share, an amount judged too low by EDP.
The Chinese state-owned company also launched a bid for EDP’s renewable energy subsidiary EDP Renovaveis.
The US ambassador to Portugal, George Glass, this month declared that “under no circumstances” would the Chinese take control of EDP assets in America, highlighting Washington’s ramped-up hostility to Chinese investment.
Chinese firms have ploughed at least €145 billion into Europe since 2010. But investment has been slowing recently as several European governments tighten rules on acquisitions by foreign firms.
Sweden’s Volvo Cars, Italian tyre-maker Pirelli, French holiday group Club Med and German machine tool firms Kuka and KraussMaffei have all passed into Chinese hands this decade.
In Portugal, the main private bank BCP, the principal insurer Fidelidade, and the electric grid management company REN have all been taken over by Chinese outfits.