ENGIE and CDPQ to Acquire Remaining 10% of TAG in Brazil

Source Press Release
Company ENGIECaisse de dépôt et placement du QuébecPetrobras (IFRS US$ Current) 
Tags Corporate Deals, Deals, LNG & Gas Storage/Processing, Pipelines/ tankers/ distribution
Date July 21, 2020

ENGIE announces that its joint bid with  Caisse de dépôt et placement du Québec (CDPQ), a global institutional investor, has been successful in acquiring the remaining 10% stake in Transportadora Associada de Gás S.A. (TAG), as part of the divestment process conducted by Petrobras. The closing value of the transaction is BRL 1.0 billion, approximately EUR 160 million. With this acquisition,  ENGIE’s total equity holdings in TAG increase to 65%1 (of which 32.5% is held by ENGIE Brasil Energia) while CDPQ will hold the remaining 35%. After completion of this deal,  ENGIE will keep the current equity consolidation method. In addition,  ENGIE expects a net debt impact of approximately EUR 105 million related to this transaction.

This acquisition follows the prior acquisition by ENGIE and CDPQ, in June 2019, of a 90% shareholding in TAG. TAG’s capacity is fully contracted on the basis of ship-or-pay clauses with an average residual duration of 11 years and will be regulated afterwards.  

Claire Waysand, interim CEO of ENGIE said: “We have been operating in Brazil for almost 25 years with a long-term investment focus. This acquisition allows us to invest further in an asset we know, capitalizing on our expertise in networks, in a key country for  ENGIE.”

TAG is the largest natural gas transporter in Brazil with a gas pipeline infrastructure of approximately 4,500 km, located along the seaboard of the southeast and northeast regions as well as a further stretch connecting Urucu to Manaus (AM). The network represents 47% of the country’s entire gas infrastructure, and has further development potential such as network extension, additional connections, gas storage development and green gases transport.

ENGIE new ownership of the asset will be structured through a 32.5% stake held via a 100% direct subsidiary of  ENGIE and through a 32.5% stake held by  ENGIE Brasil Energia (resulting in net  ENGIE ownership of 54.8% given  ENGIE Brazil minority interests)

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd