Duke Energy has reached an agreement to sell its international businesses in Peru, Chile, Ecuador, Guatemala, El Salvador and Argentina to I Squared Capital for approximately US$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 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.
The after-tax proceeds from the transaction are expected to be used to reduce Duke Energy holding company debt.
At the same time, China Three Gorges Corporation agreed to acquire Duke Energy's 2,090-megawatt business in Brazil for $1.2 billion enterprise value.
The company began the process of exiting its International Energy business segment in February 2016.
Map and brief description of Duke Energy International's operations and power plant locations:
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.
Lynn Good, president, CEO and chairman of Duke Energy, stated:
"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. 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."