ENGIE Brasil Energia sells 15% stake in TAG to CDPQ for BRL3.1bn

ENGIE Brasil Energia, renowned as Brazil’s leading 100% renewable energy company, and CDPQ, a prominent global investment group, have officially announced a major transaction involving the sale of a 15% stake in Transportadora Associada de Gás S.A. (TAG) to CDPQ. Valued at BRL 3.1 billion, approximately CAD 848 million, the deal is subject to customary price adjustments.

Following this transaction, ENGIE S.A. will maintain a 32.5% share, while ENGIE Brasil Energia’s stake in TAG will decrease from 32.5% to 17.5%. This adjustment will result in ENGIE’s total equity holdings in TAG amounting to 50%, with CDPQ acquiring the remaining 50%.

CDPQ’s increased stake in TAG comes with enhanced governance rights, mirroring those of ENGIE. This move is part of a strategic sequence that began with ENGIE and CDPQ’s initial acquisition of a 90% shareholding in TAG in June 2019, followed by the acquisition of the remaining shares in 2020.

Eduardo Sattamini, CEO of ENGIE Brasil Energia, emphasized the strategic alignment of this partial stake sale with the company’s investment plans. “The divestment is consistent with our focus on developing new renewable power plants and transmission lines, central to our growth strategy,” Sattamini said.

Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at CDPQ, highlighted the strong performance of TAG since their initial investment. “Reinvesting in TAG aligns with our infrastructure strategy, focusing on well-contracted assets and experienced management, particularly in Brazil, where we plan to expand our portfolio,” Jaclot noted.

The financial closure of this significant transaction is anticipated by the end of January 2024, pending customary closing conditions and approvals. This deal underscores a growing trend in the energy sector towards strategic investments and collaborations, particularly in the realm of renewable energy and infrastructure development.