China Southern Power Grid buys minority stake in European utility Encevo

PARIS, July 31 (Reuters) - The state-owned China Southern Power Grid company has agreed to buy a minority stake in European utility Encevo, as Chinese firms continue to acquire assets in Europe even as governments in the region try to limit their influence.

Private equity firm Ardian said on Tuesday that it had agreed to sell its minority stake in Encevo to China Southern Power Grid. Financial terms were not disclosed.

Encevo has two main subsidiaries - Creos and Enovos Luxembourg. Creos manages electricity and gas grids while Enovos Luxembourg is responsible for the sale of energy to a diversified portfolio of clients in Luxembourg and Germany.

The sale of the stake in Encevo comes after Germany last week stepped up efforts to prevent companies in critical industries from falling into Chinese hands.

German state bank KfW agreed last week to take a 20 percent stake in high-voltage energy network operator 50Hertz, fending off an offer from China's State Grid.

Britain has also taken steps to tighten rules regarding the takeover of UK assets by foreign interests, mirroring efforts in the United States, France and Australia, where there are concerns that China and other rivals are gaining access to key technologies. (Reporting by Sudip Kar-Gupta, editing by Louise Heavnes)