Equity Analysis /
Mexico

IEnova: Flash: Sempra sells minority interest in Sempra Infrastructure Partners

  • IENOVA disclosed that Sempra Energy agreed to sale to KKR & Co. a 20% interest in Sempra Infrastructure Partners

  • This would bring Sempra Infrastructure Partners' value to ~US$25.20 billion, with asset-related debt (US$8.37 billion)

  • OPA price seems to be set at MXN$83.80 and we will be attentive to news of the US and Mexican authorities’ approval

Marissa Garza Ostos
Marissa Garza Ostos

Head of Equity Research

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Jose Itzamna Espitia Hernandez
Jose Itzamna Espitia Hernandez

Senior Equity Research Analyst, Infrastructure, Materials and Transportation

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Banorte
8 April 2021
Published byBanorte

IENOVA disclosed that its controlling shareholder, Sempra Energy, announced an agreement for the sale to KKR & Co. (a leading global investment firm) of a 20% interest in Sempra Infrastructure Partners, Sempra's new company that combines the assets of IENOVA and Sempra LNG, Sempra's liquefied natural gas exporting infrastructure unit. The transaction amount is ~US$3.37 billion and is expected to be completed probably by the middle of this year, subject also to regulatory approval.

This would bring Sempra Infrastructure Partners' value to approximately US$25.20 billion, including asset-related debt (US$8.37 billion). The proceeds would be used by Sempra to finance part of its investment plans for approximately US$32.00 billion, and to strengthen its balance sheet. In turn, as mentioned, under the agreement terms, KKR would be acquiring the indirect participation in IENOVA at a price of US$4.13 per share (~MXN 83.8) based on the takeover bid proposal carried out by Sempra Energy in December 2020, as well as its share price and the FX rate on April 1, 2020.

With this announcement, the IENOVA OPA price seems to be established and, therefore, we will be attentive to any news regarding the approval of the US and Mexican regulatory authorities, since this is all that is missing for the OPA to be consummated. It is worth mentioning that there is no further information regarding the next step that Sempra Infraestructure Partners could take, thus it will also be important to know more details that will help to define if it would indeed be placed on the Mexican Stock Exchange.