Please ensure Javascript is enabled for purposes of website accessibility

Sempra Energy Sells Infrastructure Stake to KKR for $3.37 Billion

By Matthew DiLallo - Updated Apr 5, 2021 at 11:30AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The utility plans to use the cash to help fund the expansion of its U.S. operations.

Sempra Energy (SRE 0.28%) has agreed to sell a 20% interest in Sempra Infrastructure Partners to leading global investment company KKR (KKR -1.22%) for $3.37 billion in cash. The energy company is combining its non-utility infrastructure assets -- including Sempra LNG, a leading developer of liquified natural gas export infrastructure; and IEnova, a leading developer of renewable energy and natural gas infrastructure in Mexico -- into a new business platform. The deal values Sempra Infrastructure Partners at $25.2 billion, including its $8.37 billion in debt. 

This transaction will do two things for Sempra Energy. First, it will simplify the company's non-utility infrastructure investments under one self-funding platform. That will enable Sempra Energy Partners to increase its scale, unlock cost-saving synergies, highlight its value, and better position it for growth. By combining its resources with KKR, Sempra Energy will be able to capture new clean-energy investment opportunities.

Two people shaking hands with pipelines in the background.

Image source: Getty Images.

On top of that, the transaction will also provide Sempra Energy with cash proceeds to strengthen its balance sheet and fund the expansion of its core U.S. utility operations. The company currently has a $32 billion capital program underway to grow its U.S. utility operations. Sempra Energy expects that the deal will be accretive to its earnings because it's reinvesting the cash proceeds from the sale into expansion projects.

The deal completes Sempra Energy's plan to combine its non-utility infrastructure assets into one self-funding entity, which it unveiled last December. That will allow the energy company to focus on growing its U.S. utility operations and North American infrastructure, which it believes will create significant shareholder value as the continent's energy markets keep growing and become increasingly integrated.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sempra Energy Stock Quote
Sempra Energy
$161.51 (0.28%) $0.45
KKR & Co. Stock Quote
KKR & Co.
$50.94 (-1.22%) $0.63

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.