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Allens and Linklaters advise State Grid on ElectraNet acquisition

19 December 2012

Allens and Linklaters have advised a wholly-owned subsidiary of major electricity grid operator, State Grid Corporation of China, on its acquisition of a 41.11 per cent interest in South Australian electricity transmission business, ElectraNet Pty Limited, from the Queensland Government-owned Powerlink.

State Grid is ranked seventh in the 2012 Fortune Global 500 and is the world's largest utility. The deal marks the first significant investment in an Australian utility by a Chinese entity.

Linklaters partners Judie Ng Shortell and Thomas Ng and Allens partners Grant Anderson and Wendy Rae led the combined team that advised on a number of aspects of the acquisition, including negotiation of the transaction documents, due diligence, obtaining FIRB approval and Hong Kong corporate law issues.

According to Beijing-based Ms Ng Shortell, this strategic acquisition by State Grid marks its first foray into the regulated power asset market in Australia and reflects the ongoing investment trend by Chinese investors in the Australian market.

'Australia is a key market for Chinese outbound investment,' she said.

'We expect that the successful ElectraNet acquisition will encourage other Chinese entities to pursue future acquisitions in Australia.'

The transaction marks a milestone for the Allens and Linklaters alliance, as it is one of the first jointly managed deals to reach completion since the firms announced their ERI JV alliance earlier this year. In March 2012, the firms established a pan-Asian joint venture with the strategic focus on energy and resources development, project finance, infrastructure work and mergers and acquisitions in the region.

Allens' Power & Utilities sector leader, Anna Collyer, who also played a role on the deal, said she was excited about the opportunities promised by the global alliance between the two firms.

'The Australian power sector is undergoing rapid change, with increasing international investor appetite for this country's regulated assets and upcoming electricity privatisations such as that in New South Wales,' she said.

'Our joint venture is incredibly well placed to help clients from across Asia tap into these opportunities.'

Linklaters partner Thomas Ng said this was a strategically important transaction for State Grid, which also achieved a significant 'first' in the power market in Australia.

'Our team is proud to have worked on this innovative transaction,' he said.

'Successful closing of the transactions clearly demonstrates Linklaters' and Allens' ability to help Chinese clients achieve their commercial objectives, both in Australia and the wider region.'

Linklaters previously advised State Grid on its acquisition of 25 per cent of the share capital of REN – Redes Energ&#eacute;ticas Nacionais, SGPS, S.A., a Portuguese gas and electricity transmission company. The transaction was the first acquisition by a Chinese company of a stake in a European national grid company.

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Notes for editors.

Allens is a commercial law firm working throughout Australia and Asia. Through its integrated alliance with Linklaters it provides clients access to 40 offices in 28 countries around the world.