E.ON Seeks Growth Opportunities In Brazil And Chile

CFW View: E.ON's decision to take a 10% stake in Brazilian power company MPX Energia is the first move of a strategy to seek high growth markets to offset domestic and regional concerns, which have weighed heavy on the company's balance sheet and stock price. Entering Latin America through a local partner is a sensible move, and should provide it access to a market that has bucked the global trend, posting strong growth over 2011. However, we remain concerned over E.ON's high debt levels, especially considering the capex required to support this new venture.

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