Three Gorges seals EDP stake with bid of 2.7 billion euros

The Portuguese government on Thursday awarded a 21.35-percent stake in power company EDP-Energias de Portugal to China's Three Gorges for 2.7 billion euros.

As a result, Three Gorges now becomes EDP's largest shareholder followed by Spain's Iberdrola with a 6.79-percent interest and the Spanish savings bank Caja de Ahorros de Asturias with 5.01 percent. The government retains a 4-percent stake in the company.

Three Gorges beat out bids from Germany's E.ON and Brazilian power companies Cemig and Eletrobras.

The government said the Chinese power group's bid was at a 53.6-percent premium to EDP's market price on Wednesday.

Three Gorges also offered to provide 4 billion euros in financial support to EDP to help it meet its debt financing requirements. It also offered to invest 2 billion euros in Portugal to build a wind turbine plant.

The secretary of state for the treasury, Maria Luís Albuquerque, said the outcome of the tender was a "vote of confidence in the Portuguese economy." She said Three Gorges' bid "was the strongest in overall terms."

The stake was sold as part of a privatization program included in the government's austerity drive agreed with the International Monetary Fund and the European Union in exchange for a bailout package worth 78 billion euros.