US-based Sempra Energy sells 10% stake in its infrastructure unit to ADIA

By Arya M Nair, Official Reporter
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Sempra, a US-based energy infrastructure company, has agreed to sell a non-controlling 10 percent interest in its business platform, Sempra Infrastructure for $1.79 billion to a subsidiary of the Abu Dhabi Investment Authority (ADIA), the UAE’s largest sovereign wealth fund.

According to the company, this transaction implies an enterprise value for Sempra Infrastructure of $26.5 billion, including asset-related debt of approximately $8.6 billion.

In October, Sempra completed the sale of a 20 percent non-controlling interest in Sempra Infrastructure to a wholly-owned affiliate of Kohlberg Kravis Roberts (KKR), an American global investment company. Following the closing of the latest transaction, Sempra will own a 70 percent controlling stake in Sempra Infrastructure.

The transaction is expected to be completed in mid-2022, subject to customary closing conditions and consents from regulators. Under the terms of the agreement, ADIA will have certain customary minority rights in Sempra Infrastructure, commensurate with the size of the investment.

Khadem AlRemeithi
Khadem AlRemeithi
Executive Director
Real Estate & Infrastructure Department

“At ADIA, we see tremendous opportunity in the ongoing transformation of global energy markets. In North America, few businesses are as well-positioned as Sempra Infrastructure to build the new energy systems for the 21st century. We look forward to building on the partnership with Sempra and KKR to advance the business prospects of Sempra Infrastructure.”

The sale proceeds will be used to fund incremental capital expenditures at Sempra’s utilities as well as repurchase $500 million of the company’s stock, of which $300 million was completed in the fourth quarter of this year, while also supporting the company’s balance sheet.

Mr. Jeffrey W. Martin, Chairman and CEO of Sempra said that “We are excited to add ADIA to the partnership at Sempra Infrastructure. As an investor with a global footprint, we expect ADIA will help our team build out a growth platform with an increasingly global capability. The timing of the transaction is attractive because it allows us to efficiently rotate capital into a growing set of investment opportunities at our utilities and return capital to our owners in the form of share repurchases.”

Sempra Infrastructure was formed earlier this year by the merger of two world-class infrastructure companies, Sempra LNG and the Mexico-based Infraestructura Energética Nova (IEnova). The combined business consists of three growth platforms including clean power, energy networks, LNG and net-zero solutions, with a view to leveraging new opportunities that support the global energy transition.

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