Duke Energy announced it has reached an agreement to sell its international businesses in Peru, Chile, Ecuador, Guatemala, El Salvador and Argentina to I Squared Capital for approximately $1.2 billion enterprise value (cash and the assumption of debt). This represents the full remainder of the Latin American businesses Duke Energy is exiting.
The after-tax proceeds from the transaction are expected to be used to reduce Duke Energy holding company debt.
Earlier today, China Three Gorges Corporation agreed to acquire Duke Energy's 2,090-megawatt business in Brazil for $1.2 billion enterprise value.
"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," said Lynn Good, president, CEO and chairman of Duke Energy. "It's also a clear win for I Squared Capital and China Three Gorges Corporation, which are acquiring quality operations. We look forward to working with them to close the transactions."
The company began the process of exiting its International Energy business segment in February 2016.
The Duke Energy businesses I Squared Capital will acquire in Peru, Chile, Ecuador, Guatemala, El Salvador and Argentina include hydroelectric and natural gas generation plants, transmission infrastructure and natural gas processing facilities, totaling 2,300 MW.
I Squared Capital is an independent global infrastructure investment manager focusing on energy, utilities, and transport in the Americas, Europe and select high-growth economies. The company currently has approximately $4 billion of assets under management.
The I Squared Capital transaction requires Argentina antitrust approval, however the approval is not a condition of closing.
For a map and brief description of Duke Energy International's operations and power plant locations, see https://www.duke-energy.com/about-us/businesses/international.asp
As planned, Duke Energy's 25 percent equity investment in National Methanol Company, a Saudi Arabian regional producer of methanol and methyl tertiary butyl ether (MTBE), a gasoline additive, is not included in either the I Squared Capital or the China Three Gorges Corporation sale.
Duke Energy's financial advisors are Credit Suisse and J.P. Morgan. Skadden, Arps, Slate, Meagher & Flom LLP is the company's legal advisor.