Engie-led consortium buys Petrobras pipeline unit

PARIS: A consortium led by French utility Engie has won a bid for Petrobras’ TAG pipeline arm with an $8.6 billion offer, in a deal that boosts Engie’s presence in the fast-growing Brazilian market and helps Petrobras cut debts. Engie said on Monday its successful offer for a 90 per cent stake in TAG was made alongside Canada’s state-owned financial and investment firm Caisse de Dépôt et Placement du Québec, with more than $310 billion under management. Petrobras will keep the remaining 10 per cent. Engie said buying TAG, which accounts for 47 per cent of Brazil’s entire gas infrastructure and achieved core earnings of $1.14 billion in 2018, would provide a steady stream of profits. It will add to Engie’s presence in Brazil, where its unit owns assets including hydroelectric plants, thermoelectric facilities and renewable energy sources. “Our acquisition of TAG is a significant milestone for Engie in Brazil, a key market for the group where we have been present for 23 years,” said Engie Chief Executive Isabelle Kocher. Engie said the acquisition of TAG would result in its net debt increasing by around$1.8 bn. The consortium secured around $6 billion in financing to help fund the acquisition from 10 banks, three local and seven international. It did not name the lenders. — Reuters