Sempra to buy out Mexican unit at $5.81 billion valuation

FILE PHOTO: Sempra Energy headquarters is pictured in downtown San Diego, California, U.S., May 17, 2018. REUTERS/Mike Blake/File Photo

(This Dec. 2 story corrects IEnova’s valuation to $5.81 billion from $6.13 billion in headline and first paragraph. Corrects second paragraph to say Sempra owns 70.2%, not 66.43%, of IEnova.)

(Reuters) - Sempra Energy said on Wednesday it would buy the remaining stake in Infraestructura Energética Nova SAB de CV, in a deal valuing the Mexican unit at $5.81 billion, as it eyes new investments in renewables and energy storage amid growing global demand for cleaner fuels.

The company currently owns 70.2% of IEnova, according to latest company filings and its all-share offer for the rest implies a 15.2% premium to the stock’s closing price on the Mexican exchange.

The deal comes shortly after the Mexican government unveiled a second package of 29 infrastructure investments worth some 228 billion pesos ($11.36 billion), aimed at lifting the nation’s ailing economy.

The package included Costa Azul, a $2 billion LNG export plant being built by a Sempra unit in the country’s Baja California area. The proposed plant is one of the biggest privately funded energy projects in Mexico and is the only LNG export project to reach a final investment decision this year.

Oil and gas companies around the world have pushed back decisions on new LNG terminals this year after the coronavirus pandemic hammered energy demand and prices, ending a long run of rising LNG investments as Asian countries tried to meet their rising energy demand and diversify fuel sources.

Sempra shares will trade on the Mexican stock exchange following the deal, and the company will combine IEnova with its North American liquefied natural gas export infrastructure unit Sempra LNG, it said.

The company said the new unit, Sempra Infrastructure Partners, would focus on the development and construction of North American LNG export and natural gas infrastructure alongside renewable energy generation.

Sempra will also sell a non-controlling interest in the new unit to fund growth, it said. All transactions are expected to be complete in the first quarter of 2021.

Reporting by Shariq Khan in Bengaluru and Arundhati Sarkar; Editing by Shinjini Ganguli and Anil D’Silva