Updated 7:24 p.m. Duke Energy is getting out of the electricity generating business outside the U.S., through a pair of deals announced Monday worth $2.4 billion total.
The company says it's selling its Brazilian business to China Three Gorges Corporation for $1.2 billion in cash and assumed debt. The Chinese Energy company is buying Duke's eight hydroelectric plants in Brazil, which total 2,090 megawatts of electrical generating capacity. That deal still needs government approvals in Brazil and China, but Duke says it could close in two to four months. Duke also says it will sell the rest of its Latin American operations to global investment manager I Squared Capital, also for $1.2 billion in cash and assumed debt. That deal includes businesses in Peru, Chile, Ecuador, Guatemala, El Salvador and Argentina. It's expected to close by mid-2017. Duke announced in February it planned to sell all its businesses in Latin America, which have had unpredictable returns and been a drag on profits. CEO Lynn Good says the deal is a major step in the company's plan to refocus on its U.S. operations. "Our strategic transformation is gathering more momentum as we exit the Latin American market to focus on our domestic regulated core business, which was bolstered by our recent Piedmont Natural Gas acquisition,” Good said in a press release. The company completed its acquisition of Piedmont on Oct. 3.
Duke didn't break out the deal's $1.2 billion value by cash and debt. The company said it plans to use proceeds to pay down debt.
The Brazilian plants are about 48 percent of Duke's generating capacity in Latin America, which totals 4,400 megawatts.
Duke announced in February it planned to sell all its businesses in Latin America, which have had unpredictable returns and been a drag on profits.
Monday's deals leave Duke with one international investment, a 25 percent stake in National Methanol Co. The Saudi Arabian company is a regional producer of methanol and methyl tertiary butyl ether (MTBE), a gasoline additive. Duke's share price rose slightly Monday.
