Brazil's Axia Energia and CEL in Talks to Acquire Control of Transmission Company CNT

en.Wedoany.com Reported - Axia Energia and CEL Engenharia are in negotiations to acquire Caldas Novas Transmissão (CNT), a concessionaire responsible for operating transmission facilities related to the Corumbá substation in Mato Grosso do Sul state. The asset belongs to Santa Rita Comércio e Instalações, which is undergoing judicial reorganization.

According to case documents reviewed by the Administrative Council for Economic Defense (Cade), CNT was established to participate in the 2010 transmission auction, where it won Lot C for expansion facilities. The transmission company has been operating since 2013, responsible for the construction, operation, and maintenance of the concession-related facilities.

The reasons submitted by the two companies indicate that, for Axia, this acquisition aligns with its strategy to optimize minority stakes, capital discipline, and simplify its equity structure. For CEL Engenharia, the transaction helps consolidate its control over CNT and expand its influence in the power transmission sector. For Santa Rita, which is under judicial reorganization, selling this asset provides an opportunity to adjust its equity structure.

The two companies submitted the transaction to Cade, but Cade decided not to review the concentration act. The antitrust body's Superintendence-General determined that the transaction did not meet the mandatory filing revenue thresholds stipulated by law. Although the economic groups of Axia Energia and CEL each exceeded the revenue thresholds of BRL 750 million and BRL 75 million, respectively, as set forth in Article 88 of Law No. 12.529/2011, Cade found that the seller's side did not meet the condition. The agency's precedent requires that, in transactions involving the acquisition of control or equity, both the buyer and the seller must each have an economic group meeting the minimum revenue threshold. In this case, the Santa Rita group's revenue in the fiscal year prior to the transaction was below BRL 75 million, as was that of the target company CNT itself. Therefore, the transaction did not meet the legal requirements for mandatory filing.