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December 22, 2021

Abu Dhabi Investment Authority to buy stake in Sempra’s infrastructure unit

Sempra’s interest will be reduced to 70% in Sempra Infrastructure, in which KKR owns 20% stake.

By Archana Rani

Sempra has signed an agreement to divest 10% interest in Sempra Infrastructure Partners to a subsidiary of the Abu Dhabi Investment Authority (ADIA) for $1.785bn in cash.

The transaction implies $26.5bn in enterprise value for Sempra Infrastructure. This includes debt of approximately $8.6bn.

Upon the completion of the latest transaction, Sempra will have 70% ownership stake in Sempra Infrastructure.

Sempra chairman and CEO Jeffrey Martin said: “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. This transaction allows us to do both, while also supporting our balance sheet.”

Sempra plans to use proceeds from the sale to help fund capital expenditures at utilities. It will also be used to repurchase $500m of its stock and support balance sheet.

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Sempra Infrastructure was launched through the merger of two infrastructure companies including Sempra LNG and Infraestructura Energética Nova (IEnova).

Earlier this year, Sempra offloaded 20% interest in Sempra Infrastructure to KKR’s wholly owned affiliate.

The combined business comprises three growth platforms including clean power, energy networks, and LNG and net-zero solutions.

ADIA real estate & infrastructure department executive director Khadem AlRemeithi said: “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.”

Planned for completion in the summer of 2022, the transaction is subject to customary closing conditions and consents from regulators.

Earlier this year, Polish Oil & Gas Company (PGNiG) terminated an LNG deal with Sempra Energy owing to delays in the development of the Port Arthur LNG project in Texas, US.

As per the 20-year deal signed in 2018, PGNiG was to receive around two million tonnes per year (Mtpa) of LNG from the Port Arthur LNG project from 2023.

However, Sempra deferred the final investment decision in May 2021 on the project to 2022 from originally planned 2021.

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