Brazilian power firm Equatorial BMFBOVESPA:EQTL3 and Spain's Iberdrola BME:IBE are in talks with Enel MIL:ENEL to buy assets of the Italian firm in Brazil, Brazilian newspaper Valor Economico reported on Monday, citing sources.
Enel is in a spat over its power concession in Sao Paulo, with authorities considering revoking the approval due to a series of outages in recent years during heavy rains.
Equatorial and Iberdrola want Brazilian authorities to condition the concession renewal on a sale, and believe an agreement with Enel could boost the chances of such an outcome, Valor said.
Both companies have sent representatives to Rome to discuss the matter, according to the report.
The two companies also do not rule out buying all Enel assets in Brazil, Valor added.
Enel, Iberdrola and Equatorial did not immediately respond to requests for comment.
Enel has previously said it does not intend to give up the Sao Paulo concession.