China State Grid in bid to buy US wind power firm AES

State Grid Corp of China is making a rare bid for a US-based energy asset, as it holds talks with U.S. power generation firm AES Corp (AES.N) about taking a controlling stake in its U.S. wind power business.

China’s cash-flush state-owned power companies are perceived to be on an overseas buying spree. The country’s state power groups have been scooping up bargains, with dominant power distributor State Grid establishing a presence in the Philippines, Brazil and Portugal.

Based on analysts’ estimates, the assets could be worth around $1.65bn, reports Reuters.

The deal involves wind power assets with capacity of around 1100 MW and would give State Grid a roughly 80 per cent stake in AES’s U.S. wind power business, sources with direct knowledge of the matter told Reuters. It would be State Grid’s first foray into the United States.

The sources declined to be named as they were not authorized to speak with the media.

The company’s president Liu Zhenya visited the United States earlier this month as part of a delegation accompanying Chinese Vice President Xi Jinping. Two of the sources said the companies signed an agreement during that trip, but the third source said a deal is still at the negotiation stage.

AES Wind Generation, a wholly-owned part of AES Corp, operates more than 1800 MW of wind power generation capacity in the United States, China and Europe. Of that, nearly 1346 MW is in the United States, according to the company’s website.

Arlington, Virginia-based AES, which has a market value of $10.5bn, did not immediately respond to requests for comment, and State Grid’s media official declined to comment when reached by phone.

Any deal would need both Chinese and U.S. regulatory approval.

Since the failure of China’s state oil firm CNOOC’s bid to buy California rival Unocal in 2005, few Chinese companies have tried to buy U.S. conventional energy assets.

There have been some U.S.-China energy deals since then, but a successful deal by State Grid would represent a significant step for China’s efforts to enter the U.S. power market.

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