Summary
Sempra Energy (SRE) announced a significant transaction on April 4, 2021, entering into a purchase and contribution agreement with KKR Pinnacle Aggregator L.P. (KKR) to sell a 20% equity interest in its newly formed Sempra Infrastructure Partners (SIP) for $3.37 billion. SIP will consolidate Sempra's liquefied natural gas (LNG) business and its ownership in IEnova, a Mexican energy infrastructure company. This strategic move aims to monetize assets and bring in a strong financial partner to fuel future growth in the infrastructure sector. The agreement includes provisions for KKR to acquire its stake at a valuation tied to IEnova's ordinary shares, with adjustments based on the success of Sempra's planned exchange offer to acquire the remaining IEnova shares it doesn't currently own. The transaction is subject to regulatory approvals, restructuring completion, and other customary closing conditions. The formation of SIP and the partnership with KKR are expected to strengthen Sempra's position in global energy infrastructure development.
Key Highlights
- 1Sempra Energy (SRE) agreed to sell a 20% stake in its new Sempra Infrastructure Partners (SIP) subsidiary to KKR for $3.37 billion.
- 2Sempra Infrastructure Partners (SIP) will house Sempra's LNG assets and its stake in IEnova.
- 3The transaction values Sempra Global (to be renamed Sempra Infrastructure Partners) at $16.85 billion ($3.37 billion for 20%).
- 4KKR's purchase price is linked to an IEnova share price of $4.13, with potential adjustments based on Sempra's success in acquiring remaining IEnova shares via an exchange offer.
- 5The deal is subject to Mexican and US regulatory approvals, completion of internal restructuring, and other closing conditions.
- 6SIP is expected to carry approximately $8.37 billion in net debt at closing.
- 7Sempra will maintain 80% ownership and generally control of SIP, with KKR holding minority protections and certain approval rights on significant matters.