Sempra Energy International, a subsidiary of Sempra Energy, San Diego, Tuesday said it has signed an agreement with Dominion Resources Inc., Richmond, Va., to purchase Dominion's natural gas and electricity assets in Argentina for $145 million in cash.
Sempra Energy International is acquiring an additional 21.5% interest in holding companies that control Camuzzi Gas Pampeana SA, and Camuzzi Gas del Sur SA, raising its total stake to 43%. The Camuzzi Gas companies serve a combined 1.2 million customers in central and southern Argentina, delivering about one-third of all the natural gas distributed in the country.
As part of the transaction, Sempra Energy International also will acquire 25% of a holding company with a controlling interest in Empresa Distribuidora de Energia Atlantica SA, an electricity distribution company serving more than 400,000 customers in the province of Buenos Aires.
Dominion acquired ownership interests in the three Argentine utilities through its acquisition of Consolidated Natural Gas Co. in January 2000.
"This transaction effectively doubles Sempra Energy International's stake in the Camuzzi Gas companies, which are growing enterprises with strong balance sheets and solid cash flow," said Donald E. Felsinger, group president of Sempra Energy and also chairman of the subsidiary, Sempra Energy International.
"This will help us meet our aggressive growth targets for our international business and advance our strategy to expand our presence in the gas and electricity markets of the Southern Cone of South America."
Sempra Energy International already has a substantial presence in Latin American energy markets through joint and solo ventures that provide natural gas and electricity services to more than 2.5 million customers in Argentina, Canada, Chile, Mexico, Peru, and Uruguay.
The purchase does not require approval in the US; however, it will require approval by Argentine antitrust authorities. Since the transaction does not result in majority ownership, Sempra said the companies do not anticipate any problems in the review process, which should be completed by fall.
"This sale completes our exit from Latin America and further concentrates our resources and expansion efforts on growing energy markets in the Midwest, Northeast and Midatlantic regions of the US,'' said Thos. E. Capps, Dominion president and CEO.
Earlier this month, Dominion agreed to sell its 80% interest in a British power station to PowerGen PLC for $80 million. In April, the company completed the sale of its Latin American generation businesses to Duke Energy International for $405 million. In May, Dominion agreed to sell its Virginia Natural Gas utility to AGL Resources Inc. as part of its merger with Consolidated Natural Gas Co. Dominion is also divesting its Dominion Capital Financial Services subsidiary as part of the merger.
"We expect to raise more than $1.5 billion in cash through divestiture of these assets. These sales will help us strengthen our balance sheet and help us meet or exceed our earnings target of $3.25-$3.30 in 2000 and $3.50-$3.60 in 2001," Capps said.