How much cash will Sempra receive at closing, and how much is deferred?

Sempra receives $4.65 billion in cash at closing. The remaining base price is deferred: $4.14 billion (about $4.72 billion with 7.5% quarterly-compounded interest) due December 31, 2027 under instruments backed by equity commitment letters, and $1.2 billion (about $2.24 billion with interest) due roughly seven years and 91 days after closing under promissory notes. Those deferred amounts depend on the creditworthiness of KKR's indirect equity holders and co-investor, and they rank behind senior debt of the issuers' subsidiaries.

When is the transaction expected to close, and what could delay or end it?

Sempra expects closing in the second or third quarter of 2026. Closing cannot occur before March 31, 2026. Conditions include expiration of the HSR waiting period, FERC and Mexican antitrust approvals, certain third-party consents, no material adverse effect on Sempra Infrastructure Partners, and no specified downgrade events under financing arrangements. If closing is delayed past March 31, 2026, a ticking fee of 0.625% per month accrues to Sempra. Either party may terminate if closing has not occurred within 12 months of signing, and Sempra receives a $414 million termination fee if KKR fails to close when conditions are satisfied.

What are the main financial effects on Sempra's reported results?

Sempra expects to record income tax expense of about $500 million in Q3 2025, tied to outside-basis deferred tax liabilities, state tax apportionment changes, and valuation allowances. The estimate may change materially. Sempra will also stop recording depreciation on the business once it is classified as held for sale. Sempra will pay a $340 million development credit to KKR over two years starting in 2026, and it expects roughly 20% of gross proceeds to go toward cash taxes.

What new contingent obligations does Sempra take on with the PA LNG Phase 2 project?

Sempra Infrastructure Partners has committed up to $7.8 billion in capital contributions to the JVCo Member to fund its share of Phase 2 construction, which is estimated at about $14 billion in total. If the project fails to complete by a specified date, has extended operational underperformance, or loses offtake contracts without replacement, an affiliate must make a lump-sum payment to Blackstone-led investors, which is generally based on their contributions. Sempra also expects to transfer its Mustang Express Pipeline equity commitments to third parties before funding, but the filing does not state a completion date for that transfer.

How does the deal change governance and control of Sempra Infrastructure Partners?

Under the amended LPA, KKR Partners, with 65% ownership, will generally control the business and appoint four of seven board managers. Sempra appoints two managers and ADIA appoints one. Sempra keeps approval rights over certain actions, including replacing the CEO, approving certain capital expenditures, making non-pro-rata distributions, and reaching positive FID on projects. Sempra is also restricted from transferring its units before January 1, 2029. Sempra will retain the Guaymas-El Oro segment of the Sonora pipeline as a Sole Risk Project, with about $400 million of net PP&E at mid-2025.

SRE/SREA 8-K: Regulation FD

01—Abstract

Summary

Summary of the 8-K filed September 23, 2025. Cited figures are marked; the original filing is the authoritative source.

Sempra (SRE) has agreed to sell a 45% stake in Sempra Infrastructure Partners, plus all general partner interests, to affiliates of KKR and co-investor Canada Pension Plan Investment Board for an aggregate base purchase price of $9.99 billion^a.

Following closing, the KKR Partners would hold 65% of the Class A Units. Cash at closing is $4.65 billion^b, with the remainder deferred through instruments due December 31, 2027 ($4.72 billion with interest) and promissory notes due about seven years after closing ($2.24 billion with interest). Sempra expects closing in Q2 or Q3 2026, subject to HSR, FERC, Mexican antitrust approvals and other conditions.

The deal carries a 0.625% monthly ticking fee if closing slips past March 31, 2026, and a $414 million^c termination fee payable to Sempra if KKR fails to close when conditions are met. Sempra also expects a roughly $500 million income tax charge in Q3 2025 and will classify the business as held for sale, which will stop depreciation. Investors should note that Sempra is deferring a large share of the proceeds and must pay a $340 million development credit over two years, plus an estimated 20% of gross proceeds in cash taxes.

Alongside the sale, Sempra Infrastructure Partners took final investment decision on the approximately 13 Mtpa second phase of the Port Arthur LNG project, with total estimated capex of about $14 billion^d. Blackstone-led investors acquired 49.9% of the project-level JVCo for $3.4 billion funded immediately plus $3.6 billion on a schedule. The JVCo Member, a Sempra Infrastructure Partners subsidiary, holds 50.1%, and Sempra Infrastructure Partners has committed up to $7.8 billion of capital contributions to the JVCo Member.

Those commitments, along with lump-sum payment obligations if the project fails to meet deadlines, underperforms, or loses offtake, represent significant contingent exposure that management has not fully quantified in this filing. For investors, the transaction provides a substantial source of value and deleveraging capacity, but a large portion of value is deferred, depends on counterparty credit, and is subject to post-closing adjustments tied to wind facility performance and ECA LNG Phase 1 capex. The forward-looking statements section highlights counterparty risk, closing conditions, and tax and accounting uncertainty as key risks.

02—Key points

Key Highlights

Sale of 45% of Class A Units and all GP interests in Sempra Infrastructure Partners to KKR affiliates and CPP Investment Board for an aggregate base price of $9.99 billion, with KKR Partners ending with 65% ownership.
Cash at closing of $4.65 billion; the remaining proceeds are deferred via instruments due December 2027 ($4.14 billion principal, 7.5% compounded interest) and promissory notes due about seven years post-closing ($1.2 billion principal, 8.5%-10% interest).
Closing expected Q2 or Q3 2026, subject to HSR, FERC, Mexican antitrust and other approvals; $414 million termination fee payable to Sempra if KKR fails to close; 0.625% monthly ticking fee after March 31, 2026.
Purchase price deductions include $337.5 million of KKR transaction fees at closing and a $340 million development credit payable by Sempra over two years from 2026; Sempra estimates roughly 20% of gross proceeds will be paid in cash taxes.
Sempra expects a Q3 2025 income tax expense of about $500 million and will classify Sempra Infrastructure Partners as held for sale, stopping depreciation upon signing.
PA LNG Phase 2 (approx. 13 Mtpa, two trains) reached FID with about $14 billion estimated capex and 10 Mtpa of 20-year offtake contracts with ConocoPhillips, JERA, EQT and a Sempra subsidiary.
Blackstone-led investors acquired 49.9% of the Phase 2 JVCo for $3.4 billion funded now plus $3.6 billion on schedule, while Sempra Infrastructure Partners committed up to $7.8 billion of capital contributions and faces lump-sum payment obligations in certain failure scenarios.

03—Questions

Frequently Asked Questions

How much cash will Sempra receive at closing, and how much is deferred?
Sempra receives $4.65 billion in cash at closing. The remaining base price is deferred: $4.14 billion (about $4.72 billion with 7.5% quarterly-compounded interest) due December 31, 2027 under instruments backed by equity commitment letters, and $1.2 billion (about $2.24 billion with interest) due roughly seven years and 91 days after closing under promissory notes. Those deferred amounts depend on the creditworthiness of KKR's indirect equity holders and co-investor, and they rank behind senior debt of the issuers' subsidiaries.
When is the transaction expected to close, and what could delay or end it?
Sempra expects closing in the second or third quarter of 2026. Closing cannot occur before March 31, 2026. Conditions include expiration of the HSR waiting period, FERC and Mexican antitrust approvals, certain third-party consents, no material adverse effect on Sempra Infrastructure Partners, and no specified downgrade events under financing arrangements. If closing is delayed past March 31, 2026, a ticking fee of 0.625% per month accrues to Sempra. Either party may terminate if closing has not occurred within 12 months of signing, and Sempra receives a $414 million termination fee if KKR fails to close when conditions are satisfied.
What are the main financial effects on Sempra's reported results?
Sempra expects to record income tax expense of about $500 million in Q3 2025, tied to outside-basis deferred tax liabilities, state tax apportionment changes, and valuation allowances. The estimate may change materially. Sempra will also stop recording depreciation on the business once it is classified as held for sale. Sempra will pay a $340 million development credit to KKR over two years starting in 2026, and it expects roughly 20% of gross proceeds to go toward cash taxes.
What new contingent obligations does Sempra take on with the PA LNG Phase 2 project?
Sempra Infrastructure Partners has committed up to $7.8 billion in capital contributions to the JVCo Member to fund its share of Phase 2 construction, which is estimated at about $14 billion in total. If the project fails to complete by a specified date, has extended operational underperformance, or loses offtake contracts without replacement, an affiliate must make a lump-sum payment to Blackstone-led investors, which is generally based on their contributions. Sempra also expects to transfer its Mustang Express Pipeline equity commitments to third parties before funding, but the filing does not state a completion date for that transfer.
How does the deal change governance and control of Sempra Infrastructure Partners?
Under the amended LPA, KKR Partners, with 65% ownership, will generally control the business and appoint four of seven board managers. Sempra appoints two managers and ADIA appoints one. Sempra keeps approval rights over certain actions, including replacing the CEO, approving certain capital expenditures, making non-pro-rata distributions, and reaching positive FID on projects. Sempra is also restricted from transferring its units before January 1, 2029. Sempra will retain the Guaymas-El Oro segment of the Sonora pipeline as a Sole Risk Project, with about $400 million of net PP&E at mid-2025.

04—Continue

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