Duke completes sale of its Latin American assets for $1.2B

Dive Brief:

Duke Energy has completed the sale of its international business in Brazil to China Three Gorges Corp. for approximately $1.2 billion enterprise value.
The move completes Duke’s planned sale of its Latin American assets, which garnered $2.4 billion.
On Dec. 20, 2016, Duke sold assets in Peru, Chile, Ecuador, Guatemala, El Salvador and Argentina to I Squared Capital in a deal valued at $1.2 billion.

Dive Insight:

Duke Energy was one of the last U.S. utility companies with major investments in overseas power assets.

In 1999, Duke paid about $405 million for 1,200 MW of generation assets in Argentina, Belize, Bolivia and Peru from Dominion Resources. That acquisition brought Duke’s total Latin American generation portfolio to 3,800 MW.

But currency and earnings volatility, as well as a changing regulatory environment in the United States, has prompted a significant strategic shift at the company since then.

"Today marks a significant milestone in the strategic transformation of our company," Lynn Good, Duke’s chairman, president and CEO, said in a statement. "We completed these transactions ahead of schedule and are now fully focused on growing our regulated businesses in 2017 and beyond, including the natural gas platform."

China Three Gorges is acquiring 10 hydroelectric plants, which include eight plants totaling 2,057 MW on the border between Sao Paulo and Parana states and two plants totaling 33 MW on the Sapucai Mirim River in Sao Paulo State.

Duke said the Three Gorges and I Squared transactions are expected to generate about $1.9 billion in cash proceeds that it plans to use to reduce holding company debt.

In October 2016, Duke bolstered is regulated business in the U.S. with the closing $4.9 billion purchase of Piedmont Natural Gas.

Duke still holds a 25% equity stake in National Methanol Co., a Saudi Arabian regional producer of methanol and methyl tertiary butyl ether, a gasoline additive.

PPL Corp. is one of the few U.S. utilities with a significant stake in overseas electric assets with its ownership of an electric distribution network in the U.K., which it bought from Germany’s E.ON for $5.6 billion in 2011.