CHINA Three Gorges has held talks with European utilities to gauge their interest in buying EDP’s U.S. renewables business, as it looks to smooth the path for its planned takeover of the Portuguese company, three sources familiar with the matter said.

The aim of identifying potential buyers is to preempt any objections from U.S. authorities, who are increasingly scrutinizing Chinese acquisitions of American assets in strategic industries and could block the proposed takeover of EDP.

China Three Gorges has sounded out European firms including Italy’s Enel, Spain’s Iberdrola, France’s Engie and German firms E.ON and RWE, the sources said.

However while Engie would be interested in the U.S. assets, the others are unlikely to seek a deal, the sources added.

China Three Gorges launched a US$10.8 billion bid in May to take control of EDP, Portugal’s biggest company, of which it already owns 23 percent, although there is no guarantee its approach will be successful.

A strategy of lining up a prospective buyer for the U.S. assets would be an example of a Chinese company taking preemptive steps to mitigate risks associated with intensifying trade tensions between China and the United States.

European utilities have been undergoing a wave of consolidation, seeking to create scale partly because of the increasing shift to renewable energy sources that is forcing them to change business models. (SD-Agencies)