SAN DIEGO, April 5, 2021 /PRNewswire/ -- Sempra Energy
(NYSE: SRE) today announced that it has entered into a definitive
agreement to sell a non-controlling, 20% interest in Sempra
Energy's new business platform, Sempra Infrastructure Partners, to
KKR for $3.37 billion in cash. KKR is
a leading global investment firm.
This transaction values Sempra Infrastructure Partners at
approximately $25.2 billion,
including expected asset-related debt at closing of $8.37 billion.
Today's announcement is part of a series of integrated
transactions originally announced in December 2020 that are intended to simplify
Sempra Energy's non-utility infrastructure investments under one
self-funding platform, combining the strengths of Sempra LNG, a
leading developer of liquefied natural gas (LNG) export
infrastructure, and IEnova (Infraestructura Energética Nova, S.A.B
de C.V.), one of the largest private energy companies in
Mexico and a leading developer and
operator of renewables and natural gas infrastructure in that
country. This new platform is expected to create scale, unlock
portfolio synergies, highlight value and better position the
business for growth.
"Over the next decade, we expect the energy markets in
North America to continue to grow
and become increasingly integrated. Combining our resources with
KKR improves our ability to capture new investment opportunities in
cleaner forms of energy and the critical infrastructure that stores
and transports it," said Jeffrey W.
Martin, chairman and CEO of Sempra Energy. "This transaction
also sends a clear signal about the value and expected growth of
our infrastructure portfolio."
"Investing in critical new energy infrastructure creates jobs,
delivers reliable energy with fewer emissions and supports
North America's economic
recovery," said Raj Agrawal, KKR Partner and Global Head of
Infrastructure. "That is why we are excited to partner with Sempra
Energy. This infrastructure platform provides a strong foundation
to expand cleaner energy resources across the continent. Backed by
strong, contractually-supported, long-term cash flows, our
investment is also consistent with KKR Infrastructure's strategy to
seek stable and predictable returns for our investors."
KKR will be making the investment through its Global
Infrastructure Investors Funds. KKR first established its Global
Infrastructure strategy in 2008 and has since been one of the most
active infrastructure investors around the world with a team of
more than 50 dedicated investment professionals. The firm currently
has over $27 billion in
infrastructure assets under management and has made over 40
infrastructure investments across a range of sub-sectors and
geographies.
The transaction is expected to be completed by mid-2021, subject
to customary closing conditions, including consents from certain
third parties and regulators.
Highlighting Value
Sempra Energy will receive cash
proceeds from KKR at the closing of the transaction, subject to
certain customary purchase price adjustments, including changes to
account for any IEnova shares not tendered in Sempra Energy's
previously announced stock-for-stock exchange offer for the
publicly-traded shares of IEnova.
Under the terms of the agreement, KKR will be acquiring its
indirect interest in IEnova at $4.13
per share, the price calculated using the proposed exchange ratio
announced by Sempra Energy on December 2,
2020 and the closing price of Sempra Energy common stock on
April 1, 2021, the last trading day
immediately preceding the date of the agreement. KKR will have
certain minority rights with respect to Sempra Infrastructure
Partners commensurate with the size of its investment.
The new business platform is expected to create increased
shareholder value and support the global energy transition by
providing an improved platform for innovation and potential new
investments in renewables, hydrogen, ammonia, energy storage and
carbon sequestration. Sempra Infrastructure Partners owns, among
other assets:
- An LNG portfolio consisting of up to 45 million tonnes per
annum (Mtpa) of LNG export capacity in development, construction or
operation on the North American Pacific and Gulf Coasts;
- A renewable portfolio consisting of up to 4 gigawatts (GW) of
renewable energy generation in development, construction or
operation in Mexico and related
electric transmission infrastructure; and
- A natural gas infrastructure portfolio consisting of
distribution companies and certain cross-border and in-country
pipelines, including those that export U.S. natural gas to
Mexico and supply the Energía
Costa Azul LNG facility.
Proceeds from the sale will be used to help fund growth across
Sempra Energy's $32 billion capital
program, which is centered on its U.S. utilities, and to further
strengthen its balance sheet. The sale is expected to be accretive
to earnings.
Also, in December 2020, Sempra
Energy announced its intention to launch a stock-for-stock exchange
offer for the publicly-traded shares of IEnova, with Sempra
Energy's common shares to be listed on the Mexican stock exchange
(Bolsa Mexicana de Valores, S.A.B de C.V.). Sempra Energy intends
to commence this exchange offer following approval by the U.S. and
Mexican regulatory authorities.
Goldman Sachs & Co. LLC is serving as financial advisor and
White & Case LLP is serving as legal advisor to Sempra Energy
on this transaction. Credit Suisse Securities (USA) LLC and Mizuho Securities USA LLC are serving as financial advisors and
Simpson Thacher & Bartlett LLP and Creel, García-Cuéllar, Aiza y Enríquez, S.C.
are serving as legal advisors to KKR.
About Sempra Energy
Sempra Energy's mission is to be
North America's premier energy
infrastructure company. The Sempra Energy family of companies have
more than 19,000 talented employees who deliver energy with purpose
to over 36 million consumers. With more than $66 billion in total assets at the end of 2020,
the San Diego-based company is the
owner of one of the largest energy networks in North America serving some of the world's
leading economies. The company is helping to advance the global
energy transition by enabling the delivery of lower-carbon energy
solutions in each market it serves, including California, Texas, Mexico
and the LNG export market. Sempra Energy is consistently recognized
as a leader in sustainable business practices and for its
long-standing commitment to building a high-performing culture
including safety and diversity and inclusion. Sempra Energy is the
only North American utility sector company included on the Dow
Jones Sustainability World Index and was also named one of the
"World's Most Admired Companies" for 2021 by Fortune Magazine. For
additional information about Sempra Energy, please visit Sempra
Energy's website at www.sempra.com and on Twitter
@SempraEnergy.
About KKR
KKR is a leading global investment firm that
offers alternative asset management and capital markets and
insurance solutions. KKR aims to generate attractive investment
returns by following a patient and disciplined investment approach,
employing world-class people, and supporting growth in its
portfolio companies and communities. KKR sponsors investment funds
that invest in private equity, credit and real assets and has
strategic partners that manage hedge funds. KKR's insurance
subsidiaries offer retirement, life and reinsurance products under
the management of The Global Atlantic Financial Group. References
to KKR's investments may include the activities of its sponsored
funds and insurance subsidiaries. For additional information about
KKR & Co. Inc. (NYSE: KKR), please visit KKR's website at
www.kkr.com and on Twitter @KKR_Co.
Additional Information and Where to Find It
The proposed stock-for-stock exchange offer will be submitted
to shareholders of Infraestructura Energética Nova, S.A.B. de C.V.
(IEnova) for their consideration. In connection with the proposed
exchange offer, Sempra Energy has filed a registration statement
with the U.S. Securities and Exchange Commission (SEC), which
includes a prospectus relating to the offer and sale of the Sempra
Energy common stock to be issued in the exchange offer, and has
filed a prospectus and registration statement offering memorandum
with the Mexican National Banking and Securities Commission
(Comisión Nacional Bancaria y de Valores) (CNBV). Shareholders are
urged to read the registration statements carefully and in their
entirety, along with any other relevant documents or materials
filed or to be filed with the SEC or the CNBV in connection with
the proposed exchange offer or incorporated by reference in the
registration statements, because they contain important information
about the proposed exchange offer and the parties thereto. The
registration statements and other documents are available free of
charge at the SEC's internet website, www.sec.gov, and on the
CNBV's website at www.gob.mx/cnbv. The registration statements and
other pertinent documents may also be obtained free of charge by
directing a written request to Sempra Energy, Attn: Corporate
Secretary, at 488 8th Avenue, San Diego,
California 92101.
Neither this press release nor the information contained
herein shall constitute an offer to sell or the solicitation of an
offer to buy any securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. No offering of
securities in the United States or
Mexico will be made except
pursuant to an effective registration statement and by means of the
prospectus included in such registration statement and the related
materials filed with the SEC and the CNBV. The securities discussed
herein will not be offered or acquired until the CNBV has
authorized the proposed exchange offer, as provided for in the
Mexican Securities Act (Ley del Mercado de
Valores), and the SEC has declared effective the
registration statement related to the proposed exchange offer that
has been filed.
Certain Information Concerning Participants
Sempra Energy and its directors, executive officers and other
members of management and employees may be deemed to be
participants in the solicitation of tenders of securities in
connection with the proposed exchange offer. Information about
Sempra Energy's directors and executive officers is included or
incorporated by reference in its Annual Report on Form 10-K for the
year ended December 31, 2020 filed
with the SEC on February 25,
2021.
Forward-Looking Statements
This press release contains statements that constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are based on assumptions with respect to the future,
involve risks and uncertainties, and are not guarantees. Future
results may differ materially from those expressed in any
forward-looking statements. These forward-looking statements
represent our estimates and assumptions only as of the date of this
press release. We assume no obligation to update or revise any
forward-looking statement as a result of new information, future
events or other factors.
Forward-looking statements in this press release include any
statements regarding the ability to complete the proposed
transactions described herein on the anticipated timeline or at
all, the anticipated benefits of these transactions if completed,
the projected impact of these transactions on Sempra Energy's
performance or opportunities, and any other statements regarding
Sempra Energy's expectations, beliefs, plans, objectives or
prospects or future performance or financial condition as a result
of or in connection with these transactions. In this press release,
forward-looking statements can be identified by words such as
"believes," "expects," "anticipates," "plans," "estimates,"
"projects," "forecasts," "should," "could," "would," "will,"
"confident," "may," "can," "potential," "possible," "proposed," "in
process," "under construction," "in development," "target,"
"outlook," "maintain," "continue," or similar expressions, or when
we discuss our guidance, priorities, strategy, goals, vision,
mission, opportunities, projections, intentions or
expectations.
Factors, among others, that could cause our actual results
and future actions to differ materially from those described in any
forward-looking statements include risks and uncertainties relating
to: the timing of the proposed transactions described herein; the
ability to satisfy the conditions to closing these transactions;
the ability to obtain regulatory approvals necessary to complete
these transactions; the ability to achieve the anticipated benefits
of these transactions; the effect of this communication on Sempra
Energy's or IEnova's stock prices; transaction costs; the diversion
of management time on transaction-related issues; the effects on
these transactions of industry, market, economic, political or
regulatory conditions outside of Sempra Energy's control; the
effects on these transactions of disruptions to Sempra Energy's or
IEnova's respective businesses; California wildfires, including the risks that
we may be found liable for damages regardless of fault and that we
may not be able to recover costs from insurance, the wildfire fund
established by California Assembly Bill 1054 or in rates from
customers; decisions, investigations, regulations, issuances or
revocations of permits and other authorizations, renewals of
franchises, and other actions by (i) the Comisión Federal de
Electricidad, California Public Utilities Commission (CPUC), U.S.
Department of Energy, Public Utility Commission of Texas, and other regulatory and governmental
bodies and (ii) states, counties, cities and other jurisdictions in
the U.S., Mexico and other
countries in which we do business; the success of business
development efforts, construction projects and major acquisitions
and divestitures, including risks in (i) the ability to make a
final investment decision, (ii) completing construction projects or
other transactions on schedule and budget, (iii) the ability to
realize anticipated benefits from any of these efforts if
completed, and (iv) obtaining the consent of partners or other
third parties; the resolution of civil and criminal litigation,
regulatory inquiries, investigations and proceedings, and
arbitrations, including, among others, those related to the natural
gas leak at Southern California Gas Company's (SoCalGas) Aliso
Canyon natural gas storage facility; the impact of the COVID-19
pandemic on our capital projects, regulatory approval processes,
supply chain, liquidity and execution of operations; actions by
credit rating agencies to downgrade our credit ratings or to place
those ratings on negative outlook and our ability to borrow on
favorable terms and meet our substantial debt service obligations;
moves to reduce or eliminate reliance on natural gas and the impact
of volatility of oil prices on our businesses and development
projects; weather, natural disasters, pandemics, accidents,
equipment failures, explosions, acts of terrorism, computer system
outages and other events that disrupt our operations, damage our
facilities and systems, cause the release of harmful materials,
cause fires and subject us to liability for property damage or
personal injuries, fines and penalties, some of which may not be
covered by insurance (including costs in excess of applicable
policy limits), may be disputed by insurers or may otherwise not be
recoverable through regulatory mechanisms or may impact our ability
to obtain satisfactory levels of affordable insurance; the
availability of electric power and natural gas and natural gas
storage capacity, including disruptions caused by failures in the
transmission grid, limitations on the withdrawal of natural gas
from storage facilities, and equipment failures; cybersecurity
threats to the energy grid, storage and pipeline infrastructure,
the information and systems used to operate our businesses, and the
confidentiality of our proprietary information and the personal
information of our customers and employees; expropriation of
assets, failure of foreign governments and state-owned entities to
honor their contracts, and property disputes; the impact at San
Diego Gas & Electric Company (SDG&E) on competitive
customer rates and reliability due to the growth in distributed and
local power generation, including from departing retail load
resulting from customers transferring to Direct Access and
Community Choice Aggregation, and the risk of nonrecovery for
stranded assets and contractual obligations; Oncor Electric
Delivery Company LLC's (Oncor) ability to eliminate or reduce its
quarterly dividends due to regulatory and governance requirements
and commitments, including by actions of Oncor's independent
directors or a minority member director; volatility in foreign
currency exchange and interest and inflation rates and commodity
prices and our ability to effectively hedge these risks; changes in
tax and trade policies, laws and regulations, including tariffs and
revisions to international trade agreements that may increase our
costs, reduce our competitiveness, or impair our ability to resolve
trade disputes; and other uncertainties, some of which may be
difficult to predict and are beyond our control.
These risks and uncertainties are further discussed in the
reports that Sempra Energy has filed with the SEC. These reports
are available through the EDGAR system free-of-charge on the SEC's
website, www.sec.gov, and on the company's website, www.sempra.com.
Investors should not rely unduly on any forward-looking
statements.
Sempra North American Infrastructure, Sempra LNG, Sempra
Mexico, Sempra Texas Utilities, Oncor and IEnova are not the same
companies as the California
utilities, SDG&E or Southern California Gas Company, and Sempra
North American Infrastructure, Sempra LNG, Sempra Mexico, Sempra
Texas Utilities, Oncor and IEnova are not regulated by the
CPUC.
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SOURCE Sempra Energy