State Grid International Development Co., Ltd. reached an agreement to acquire 96.04% stake in Compañía General de Electricidad S.A. (SNSE:CGE) from Naturgy Energy Group, S.A. (BME:NTGY) and others for €2.6 billion on November 13, 2020. As on June 23, 2021, State Grid International Development Co., Ltd. entered into a revised agreement to acquire Compañía General de Electricidad S.A. from Naturgy Energy Group, S.A. and others for €2.7 billion. Assets in the Argentine market were not included in the transaction. The consideration is payable in cash once the transaction has been completed. Naturgy has planned to earmark the funds from the transaction for investment in assets, renewable energies and electricity grids, which will achieve the profitability indicators set by the company and strengthen its position in the energy transition. Once the sale has been completed, the contribution to the EBITDA of Europe and the rest of the world (excluding Latin America) will be increased from 61% to 66% at the end of the third quarter of 2020. The transaction will reduce Naturgy's consolidated net debt by approximately €3.9 billion, to €10.8 billion, providing the company with significant financial capacity to take on growth opportunities linked to the energy transition, which can create value.

The completion of the transaction is subject to the required regulatory approvals and authorizations by the competition supervisory bodies in Chile. A meeting of shareholders of Naturgy will be held on December 29, 2020 to pronounce on the approval or rejection of the sale to Naturgy Inversiones Internacionales, SA Agency of the total shareholdings of the Compañía General de Electricidad in CGE Argentina SA, Agua Negra SA and Gascart SAIt. State Grid and Naturgy are to conclude the transaction after completing domestic and overseas approval procedures. The extraordinary shareholders' meeting of CGE held on December 29, 2020 approved this transfer after a favorable report prepared by KPMG in which an independent assessment of these businesses was carried out. The company is also pending approval by the bondholders of the solidarity increase that links CGE GAS Natural through two of the bond lines. As of March 31, 2021, National Economic Prosecutor's Office approved the deal. Naturgy expects that closing of the transaction will occur prior to the end of February 2021.The transaction will result in compelling returns on exit with pre-tax equity IRR of ~13%. The offer will remain open from June 22, 2021 and is expected to close on July 23, 2021.

Banco Santander, S.A. (BME:SAN) and Banco Bilbao Vizcaya Argentaria, S.A. (BME:BBVA) acted as financial advisors to State Grid. Citigroup Inc. (NYSE:C) acted as financial advisor to Naturgy. Macarena Ravinet, Josefina Yávar and Tomás Kubick of Guerrero, Olivos, Novoa y Errazuriz acted as legal advisors to Compañía General de Electricidad S.A. and Naturgy Energy Group, S.A. Rodrigo Ochagavía, Ariel Mihovilovic, Santiago Bravo, Patricio Smart, Carmen Luz Chavarría, María Jesús Muñoz and Juan Pablo Celis of Claro & Cia and Judie Ng Shortell and Marta Kelly of Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as the legal advisors to State Grid International Development Co., Ltd. Banchile Corredores de Bolsa S.A. acted as financial advisor to Naturgy Energy Group, S.A. Roberto Guerrero V, Macarena Ravinet, Josefina Yávar, Gianfranco Lotito and Tomás Kubick Cuatrecasas has advised Naturgy on the transaction as their legal advisors.

State Grid International Development Co., Ltd. completed the acquisition of 96.04% stake in Compañía General de Electricidad S.A. (SNSE:CGE) from Naturgy Energy Group, S.A. (BME:NTGY) and others on July 26, 2021. Post-closing of the transaction, Naturgy finalizes the sale of its Chilean electricity network business. As of July 29, 2021, The transaction has received the relevant regulatory approvals, as well as the necessary authorisations from the competition supervisory bodies.