ENGIE, a world energy leader, announces that together with Caisse de dépôt et placement du Québec (CDPQ), a global institutional investor, it has made the winning bid in a competitive process conducted by Petrobras for the acquisition of a 90% shareholding stake in Transportadora Associada de Gás S.A. (TAG) with a final and binding offer amounting to US$8.6 billion.
ENGIE will have a stake of 58.5% in the asset (of which 29.25% through ENGIE Brasil Energia) and CDPQ will have a stake of 31.5%, while Petrobras will maintain a 10% stake in TAG’s capital. In addition to its ownership, ENGIE will be responsible for the operation and maintenance after the third year.
The transaction is conditional to the approval of the Extraordinary General Meeting of Petrobras and the Conselho Administrativo de Defesa Econômica (CADE) (the Brazilian anti-trust authority) and the European Union anti-trust authority.
TAG represents ENGIE’s debut in the natural gas segment in Brazil and is aligned with the Group’s global strategy to rebalance the geographic and regulatory exposures of its networks activities by strategically positioning itself on the steadily growing Brazilian gas market, while generating additional revenues. It will contribute to its ambition of leveraging sophisticated large-scale energy infrastructures such as the TAG pipeline, to accompany the cost-efficient diversification and decarbonization of the energy mix in its core countries.
The investment is also in line with ENGIE’s goal of generating revenues from assets in infrastructures – such as gas pipelines – and where agreements are long term. The business will allow ENGIE to diversify its activities in Brazil while enhancing its position in Latin America. ENGIE will bring its international experience of operating gas pipelines in competitive markets to the Brazilian domestic market. ENGIE currently operates more than 32,000 km of gas pipelines in Europe, Mexico, Chile, Argentina and Turkey.
“TAG’s acquisition is an historic event for ENGIE in Brazil, where we have been operating for 23 years and where the company is always positioning itself as a long-term investor based on its belief in the country’s potential. The transaction will be instrumental in the Group’s rapid growth in Brazil from new sources of revenue, ensuring the sustainability of our presence in the domestic market, as well as illustrating our commitment to the Brazilian energy transition,” Maurício Bähr, CEO of ENGIE Brasil observed.
According to Bähr, one of ENGIE’s strategic objectives is “to grow in renewable energies and in infrastructures such as transmission lines and the gas chain, as well as bring the company ever closer to the final client.” Based on this guidance, he says, the company continues to examine the development and acquisition of gas distributors and transmission companies.
CDPQ’s first infrastructure investment in Brazil
This new acquisition reflects CDPQ’s investment approach, which focuses on quality assets and strong partners.
“We are very pleased to work alongside ENGIE, a world leader in its industry. We welcome the company’s knowledge of the energy sector and their long track record in Brazil,” said Emmanuel Jaclot, Executive Vice-President, Infrastructure at CDPQ. “Our first infrastructure investment in Brazil represents an important step in the geographic diversification of our portfolio, a key component to long-term performance.”
TAG is the largest natural gas transportation network owner in Brazil with approximately 4,500 km of gas pipeline infrastructure located along the coast of the Northeast and Southeast regions in addition to a stretch linking Urucu to the city of Manaus (AM). The network also has 12 gas compression stations (6 proprietary and 6 subcontracted) and 91 delivery points.
ENGIE is the largest private power producer in Brazil, operating an installed capacity of 9,775 MW in 56 power plants, which represents about 6% of the country’s capacity. The Group has 90% of its installed capacity in the country generated from clean, renewable sources with low emissions of greenhouse gases.
The Group also operates in the commercialization of energy in the free market and is among the largest companies in distributed photovoltaic generation. It has a complete portfolio of integrated solutions focused on cost reductions and improving infrastructure for companies and cities. The solutions focus on energy efficiency, energy monitoring and management, contract management of power supply, public lighting, HVAC systems, telecommunication, security as well as urban mobility systems for smart cities. With 2,300 employees, ENGIE’s domestic turnover was of R$ 9.3 billion in 2018.
ENGIE is a global reference in low-carbon energy and services. In response to the urgency of climate change, our ambition is to become the world leader in the zero-carbon transition of our customers, in particular businesses and local authorities. We rely on our key businesses (renewable energy, gas, services) to offer competitive turnkey solutions “as a service.” With our 160,000 employees, and our customers, partners and stakeholders, we are a community of imaginative builders, committed every day to more harmonious progress.
Turnover in 2018: 60.6 billion euros. The Group is listed on the Paris and Brussels stock exchanges (ENGI) and is represented in the main financial indices (CAC 40, DJ Euro Stoxx 50, Euronext 100, FTSE Eurotop 100, MSCI Europe) and non-financial indices (DJSI World, DJSI Europe and Euronext Vigeo Eiris – World 120, Eurozone 120, Europe 120, France 20, CAC 40 Governance).
ABOUT CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC
Caisse de dépôt et placement du Québec (CDPQ) is a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans. As at December 31, 2018, it held CA$309.5 billion in net assets. As one of Canada’s leading institutional fund managers, CDPQ invests globally in major financial markets, private equity, infrastructure, real estate and private debt. For more information, visit cdpq.com, follow us on Twitter @LaCDPQ or consult our Facebook or LinkedIn pages.