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.
Iberdrola did not immediately respond to requests for comment.
Enel said it wants to renew the Sao Paulo concession and "denied speculation regarding negotiations involving a change of control" of the unit.
Equatorial said it is "always attentive to opportunities" in its business areas "but does not comment on specific business or acquisition possibilities."