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25 Oct 2019, Stella Zlatareva, EMIS M&A Team

U.S. Sempra Energy inks USD 3.6bn sale of Peruvian power assets to China Yangtze

The top deal of the month, accounting for nearly 10% of the total value of deals in emerging markets in September, was the sale of the Peruvian power distribution business of US energy infrastructure giant Sempra Energy for USD 3.6bn to China's largest publicly-traded utility China Yangtze Power. 

As part of it, the buyer will secure majority stakes in three Peruvian units. The most important one is Luz del Sur, which is the largest electric power distribution company in Peru, catering to a population of nearly 5 million. The other assets included in the deal are electric construction and infrastructure services provider Tecsur SA, and power generation firm Inland Energy SAC.

Sempra Energy commented that the proceeds from the deal will strengthen its balance sheet while the disposal of the businesses will allow it to focus on core utilities in North America (i.e. California, Texas, Mexico).

News about the potential disposal surfaced in mid-2018 when activist investors Elliott Management Corp and Bluescape Resources built a nearly 5% interest in Sempra and started pushing for the company's overhaul via the sale of three Latin American companies. Those firms are Luz del Sur, Mexican energy infrastructure firm IEnova, and Chilean utility Chilquinta Energia.

Without wasting any time, earlier in October Sempra inked the sale of Chilquinta Energia for more than USD 2.2bn to another Chinese utility, State Grid. 

Original source: EMIS - DealWatch

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