Sempra Energy, one of the largest utilities by consumer base in the US, with reported revenues of $11.6bn in 2018, has sold its 100% stake in Chilquinta Energía, 100% stake in Tecnored S.A. and its 50% stake in Eletrans S.A. to State Grid International Development Limited (SGID) for $2.23bn, influenced by realizable business opportunities, progressive market regulations, and attractive market dynamics, says GlobalData, a leading data and analytics company.
In 2018 following a review of its operations, the company announced a reorganization program focused on improving and honing its business activities to the North American market, in particular California and Texas, which are essential to its long-term plans. The program proposed the sale of a number of overseas assets along with its entire US based renewable portfolio and midstream assets such as gas storage facilities.
Nirushan Rajasekaram, Power Analyst at GlobalData, comments: "As part of this reorganization program, known as Vision 2022, Sempra sold off its solar PV assets in the US earlier this year. In addition, the company sold its assets in Peru to China Yangtze Power International (Hongkong) Co for $3.59bn in September this year. The current divestiture is also a part of this strategy as the company wants to focus on California, Texas and Mexico, as these markets have great demographic trends and good business fundamentals, therefore offering meaningful growth opportunities.
"By focusing on the transmission and distribution (T&D) part of the power value chain, Sempra will reduce the commodity risk and generation exposure. Similarly, in the natural gas value chain, it will focus on LNG tolling, pipeline transmission and gas distribution, which it perceives as low-risk businesses."