A consortium led by French energy group Engie won the competitive bidding process conducted by Petrobras for the sale of a 90% equity stake in Brazil's largest natural gas transmission network owner Transportadora Associada de Gas S.A. (TAG) with a final and binding offer for $8.6 billion, Engie announced Monday.
The winning offer for the 90% equity stake in TAG was made by a consortium composed of Engie S.A, Engie Brasil Energia and la Caisse de depot et placement du Quebec (CDPQ).
Petrobras will maintain a 10% equity stake in TAG, whose assets consist of 4,500 kilometers of gas pipelines in Brazil, representing 47% of the country’s entire gas infrastructure.
According to Engie's statement, the group's net total ownership of TAG (directly and indirectly through Engie Brasil Energia) will amount to 49.3%.
In addition to its ownership, Engie will be the industrial partner for TAG, managing the asset after the closing of the transaction and taking 100% of the operations and maintenance after the third year.
Engie's CEO Isabelle Kocher called the acquisition a significant milestone for the group in Brazil, a key market where they have been present for 23 years.
"It is fully aligned with Engie’s strategy to become the leader of the zero-carbon transition, supporting Brazil in the decarbonizaion of its energy mix. It will also enable the group to build on its infrastructure expertise while diversifying its network activities and seizing opportunities in growing markets," she added.
According to the press release, the transaction is conditional upon the approval of the relevant governance bodies of Petrobras and the Brazilian and European Union anti-trust authorities.
Closing is expected by the end of the first half of 2019. The group will detail further financial impacts of TAG acquisition once closing is achieved.
By Hale Turkes