Indecopi fines Luz del Sur S/5.5 million for incomplete information in wind asset acquisitions

In 2023, Luz del Sur sought Indecopi’s approval for acquiring Sojitz Arcus Investment S.A.C., a move that would grant indirect control over key assets including Majes Arcus and the Marcona and Tres Hermanas wind farms. When questioned about investment plans for the next five years, Luz del Sur declared no concrete projects. However, records showed that four days before this response, the company’s board had authorized participation in the “Project Saphire,” a binding offer to acquire the aforementioned wind farms. This omission led Indecopi’s Commission of Free Competition to determine Luz del Sur provided false and incomplete information, deeming the offense “very serious.”

The regulatory body emphasized the critical role of transparent and comprehensive data submission in properly assessing mergers’ competitive impacts. Luz del Sur’s failure to disclose “Project Saphire” hindered evaluation of the operation’s effects on the electricity market structure and competition. The 1,000 UIT (5.5 million soles / ~$1.64 million USD) fine is the first under the current merger control law, illustrating Peru’s intent to enforce stricter compliance amid rising foreign capital involvement in its energy sector.

Luz del Sur has announced its intention to appeal, arguing the sanction stems from a technical disagreement over the interpretation of reporting obligations, asserting good faith and transparency in its acquisition processes. The company maintains that all notified transactions over the past three years were authorized unconditionally, reinforcing its commitment to legal and corporate governance standards. This dispute highlights the evolving legal landscape for mergers and acquisitions in Peru’s critical power infrastructure, with potential implications for both domestic and foreign investors focused on renewable energy expansion.