Duke to shed Latin America power assets in $2.4B deal

Dive Brief:

Duke Energy announced yesterday it had found buyers for its international businesses in a pair of deals valued at $2.4 billion. The company announced in February that volatility in Brazil had led it to unload generation there.
In one deal, I Squared Capital agreed to buy Duke's businesses in South and Central America for approximately $1.2 billion enterprise value.
In the second, Duke will sell more than 2,000 MW of hydroelectric capacity in Brazil to China Three Gorges Corp. for approximately $1.2 billion.

Dive Insight:

Duke announced back in February that volatility in Latin America was forcing it to rethink its portfolio. Now, the company has reached agreements to sell its natural gas and hydroelectric assets in Brazil, Peru, Chile, Ecuador, Guatemala, El Salvador and Argentina.

"Our strategic transformation is gathering more momentum as we exit the Latin American market to focus on our domestic regulated core business, which was bolstered by our recent Piedmont Natural Gas acquisition," Duke President and CEO Lynn Good said in a statement.

The deal with China Three Gorges includes 10 hydro plants in Brazil, according to SNL Energy, which Duke said represent 2,090 MW of capacity. The businesses sold to I Squared Capital include hydroelectric and gas generation plants, transmission infrastructure and natural gas processing facilities, totaling 2,300 MW.

Duke said the I Squared Capital transaction requires Argentina antitrust approval, but the approval is not a condition of closing.

As previously announced, Duke's sales do not include its 25% equity investment in National Methanol Co., a Saudi Arabian regional producer of methanol and methyl tertiary butyl ether, a gasoline additive. Credit Suisse and J.P. Morgan are financial advisors on the sales.

Last month, in the Piedmont acquisition mentioned by Good, the North Carolina Utilities Commission gave final approval. Commission staff in June recommended that the $4.9 billion deal should move ahead, after the company committed to $10 million in gas bill savings for North Carolina customers in the first two years. The acquisition adds Piedmont's 1 million gas customers in North Carolina, South Carolina and Tennessee, to Duke existing customer base.