Takeover of EDC Buoys Venezuela Markets

Venezuelan investors were cheered Friday by the government's deal to buy out the country's top electricity company from U.S.-based AES Corp., lifting hopes that President Hugo Chavez's government may fairly compensate other companies it nationalizes.

Chavez triggered a selloff in local stocks last month when he announced the nationalization of Electricidad de Caracas, or EDC, and other companies as part of his plans to bring key industries under state control.

But the government on Thursday signed an agreement with Arlington, Virginia-based AES to purchase its 82-percent stake in EDC for US$739.3 million (euro569.3 million), a deal analysts said appeared to fairly compensate AES shareholders.

"It turns out very well for the American investors," said Luis Gustavo Richard, financial analyst with local brokerage InterAcciones Casa de Bolsa CA.

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