Four investors will compete for Saeta Yield next week. The company, owned by Canadian fund Brookfield, expects to receive four final bids from China Three Gorges, Masdar, Engie and Total, according to financial sources. Bids are estimated at 1.7 billion euros, including debt.
The sale of Saeta Yield faces its final phase. The former renewable subsidiary of ACS has a capacity of 1,200 MW in solar and wind, although Brookfield has decided to keep the portfolio of solar thermal assets on the sidelines. This fund, which acquired Saeta Yield in 2018 through a takeover bid, has hired Société Générale and Santander to pilot the transaction. The company is valued at around 1,700 million, but discounting the 700 million in debt, the capital remains at around 1,000 million euros. This includes 28 wind farms and 10 photovoltaic plants, spread across Spain, Portugal and Uruguay, in addition to the seven solar thermal plants.
China Three Gorges has positioned itself as one of the favorites during the process, but its intention is to acquire only the assets in Spain, while Exus is running as an ally to keep the Portuguese part. This makes the Chinese bid less attractive. China Three Gorges is already a regular investor in renewables in Spain. It has an asset volume of 1,000 million in this market. In December 2020, it opened headquarters in the capital, from which it controls a good part of the Chinese energy company’s commitment to southern Europe. The office is led by Ignacio Herrero, an experienced investment banker specialized in energy who has already worked at Citi, Deutsche Bank and Credit Suisse.
Masdar, which has stepped up its game in renewables in Spain in recent months, is in the running. This is the renewable energy company from Abu Dhabi – backed by the Emirati sovereign wealth fund, as is the electricity company Taqa, which until a few weeks ago was negotiating with Criteria to launch a joint takeover bid for Naturgy – which has just signed an agreement with Iberdrola to invest 15 billion euros in offshore wind power and is negotiating to become a minority partner in an Endesa renewable energy portfolio.
Two companies from the sector are up against these two states, China and Abu Dhabi. Specifically, the French oil company Total and the electricity company Engie, which already acquired Eolia from Aimco in 2021, are the other two investors that have made it to the final of the auction. Other companies from the sector were left behind, such as the Italian Enel (owner of Endesa), the Austrian Verbund, the Portuguese Finerge and the Nordic Statkraft. Naturgy also looked into participating in the process, although it decided not to submit an offer and opt for the other large portfolio at stake, the 400 MW that Acciona has put up for sale. Some funds were also left out, such as KKR, which has finally opted to return to renewables in Spain with an investment in green hydrogen with Ignis. Saeta Yield has around 150 employees, which has removed some of these competitors from the bidding.
ACS floated 51% of Saeta Yield on the stock market in 2015. Three years later, it sold its entire stake to Brookfield in a takeover bid launched by the pension fund, which valued it at 1 billion euros. Since then, it has explored the sale of this renewable platform on several occasions. Specifically, the fund’s eyes were on solar thermal assets. In 2020, it launched the sale of these 7 solar thermal plants, in a process piloted by Santander and Bank of America. An alliance of Q Energy and CDPQ negotiated this transaction exclusively, but ultimately they did not reach an agreement.
Now it faces another change of hands. Brookfield will receive the final bids for the asset next week. The idea is to choose the winner then, so that the deal can be finalised before August.
Other processes
The sale process of Saeta Yield contrasts with investors’ doubts about the renewable sector, fueled by price falls in wholesale markets and increases in interest rates. The greater weight of the wind part in Saeta Yield increases the price that investors are willing to pay.
At the same time that Brookfield is looking to sell this business, Acciona has also put a 390 MW portfolio on the market, valued at around 400 million, in a process piloted by BNP Paribas. In this case, Naturgy, Engie and China Three Gorges, among others, are also in the running.
Endesa is also outlining its own process, known as Project Ra, to bring in a partner with a minority stake in its renewable subsidiary. The company led by José Bogas seeks to sell 49% of a macro portfolio valued at 2,000 million euros, although it is also considering dividing the transaction into several smaller processes. It has two offers for the company, one from Masdar itself and also one from the Apollo fund.
Repsol is also exploring the possibility of inviting an investor into its renewable energy subsidiary, two years after having welcomed a consortium signed by Crédit Agricole Assurance and EIP, which hold 25% of the capital. The favourite investor for this is the oil giant Aramco, with whom it has been negotiating exclusively in recent weeks.
The joy of the past few months is a long way off. At the end of 2023, Statkraft acquired Enerfín, Elecnor’s renewables subsidiary. A few months earlier, Naturgy signed the purchase of Ardian’s assets in Spain, consisting of 12 wind farms, for €600 million last spring. Verbund, for its part, acquired more than 4 GW from Q Energy in 2022 for €1 billion, which it later expanded by 257 MW with an acquisition from EDPR.
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