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Cofece approves Black River purchase of Sempra Energy assets

The Federal Economic Competition Commission (Cofece) of Mexico approved a concentration of certain assets between Black River and Sempra Energy related to the transportation of pipelines.

In December 2021, an agreement was entered into to sell an additional 10% of NCI (non-controlling interest) in Sempra Infrastructure Partners (SI Partners) to ADIA (Black Silverback) for cash proceeds of $1.8 billion, subject to adjustments .

Sempra Energy expects the transaction to close in the summer of 2022.

In this regard, on January 21, 2022, Black River and Sempra Energy notified Cofece of their intention to carry out a merger, in accordance with the provisions of article 90 of the Federal Economic Competition Law of Mexico.

In Mexico, the effect of the transaction will be that Black River will acquire an indirect interest in the Mexican subsidiaries indirectly owned by Sempra Energy.

Cofece

Sempra Energy intends to use the expected proceeds from the sale to ADIA to help fund incremental capital expenditures at Sempra California and Sempra Texas Utilities, to pay off commercial paper loans used to repurchase $500 million in shares of their common shares (300 million of which were completed in the fourth quarter of 2021 and an additional 200 million of which were completed in the first quarter of 2022), and strengthen its balance sheet.

Following the closing of the ADIA transaction, Sempra, KKR and ADIA would directly or indirectly own a 70%, 20% and 10% stake, respectively, in SI Partners.

KKR Pinnacle Investor (as successor in interest to KKR Pinnacle Aggregator) is a subsidiary of Kohlberg Kravis Roberts & Co.

As of December 31, 2021, SI Partners indirectly owned 99.9% of the outstanding shares of IEnova.

Under the terms of the ADIA Purchase Agreement, there will be a proportional adjustment to the purchase price at closing for any remaining IEnova shares not owned by SI Partners at closing and generally taking into account cash distributions made to, or contributions of capital made by, the partners of SI Partners, from and after the date of the ADIA Purchase Agreement until the closing.

 

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