The buyer is the Abu Dhabi Investment Authority, or ADIA.
Sempra Infrastructure Partners includes the company’s energy networks — including the business formerly called IEnova — as well as its liquefied natural gas (LNG) export business. Investment firm KKR holds 20% of Sempra Infrastructure Partners. Following the proposed deal, Sempra will hold 70%.
Proceeds from the sale will be used to help fund incremental capital expenditures at Sempra’s utilities and repurchase $500 million of the company’s stock, of which $300 million was completed in the fourth quarter of this year, while also supporting the company’s balance sheet. The transaction is expected to be accretive to earnings as the proceeds are deployed.
Sempra said it entered into a definitive agreement to sell the 10% interest to the institution that invests funds on behalf of the government of Abu Dhabi in the United Arab Emirates.
Sempra said it expects the transaction to be completed in the summer of 2022. The deal is subject to regulatory approval as well as customary closing conditions.
“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,” said Jeff Martin, chairman and CEO of Sempra, in a statement issued by the company. “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.”
White & Case LLP and Sullivan & Cromwell LLP are serving as legal advisers to Sempra. Milbank LLP and Gonzalez Calvillo S.C. are serving as legal advisers to ADIA.
Abu Dhabi, with a population of approximately 1.5 million, is the capital of the United Arab Emirates. Abu Dhabi is one of six states that banded together to form the UAE in 1971. With a land area roughly the size of South Carolina, the UAE shares land borders with Saudi Arabia and Oman to the west, south and east; its northern coast fronts the Persian Gulf. The UAE’s population of 9.9 million is mostly immigrant and mostly in cities, according to the CIA World Factbook. The UAE’s per capita gross domestic product of $67,100 is on par with leading Western European nations. Oil has been an important commodity in the last 60 years; the UAE is the world’s fifth-largest exporter of crude oil. Global finance also drives the UAE’s economy.