Petroleo Brasileiro SA (Petrobras) agreed to sell its 90% stake in a Brazilian natural gas pipeline company to France’s Engie SA and Canadian pension fund Caisse de Depot et Placement du Quebec for $8.6 billion.
Engie and Caisse won the bidding war for the unit, Transportadora Associada de Gas, known as Tag, beating out Australia’s Macquarie Group Ltd. and a joint bid from EIG Global Energy Partners and Mubadala Development.
It is the biggest-ever single asset sale for Petrobras, whose new CEO, Roberto Castello Branco, wants to speed divestitures begun years ago, when the state-run energy major became the world’s most indebted oil company.
Engie, which operates a majority of France’s gas network, has said it could use its expertise to develop Tag, which should benefit from growing demand for the fuel in Brazil, Kallanish Energy learns.
Tag operates a 2,800-mile pipeline network that spans 10 states in northern Brazil. The sale price includes $800 million to pay off Tag’s debt to Brazil National Development Bank, or Bndes, the company said in a statement Friday.
Under new management since the election of President Jair Bolsonaro, Petrobras is looking to sell roughly $27 billion of assets to help slash debt and focus more resources on its core offshore crude production.
“We need to raise returns for shareholders, and fast,” Castello Branco said in an interview in March.
When the transaction is completed, Engie will have a 58.5% stake in Tag, while Caisse will own 31.5%, the companies said, in a statement.
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