One of the largest utility builders and providers in North America, Sempra Infrastructure Partners, announced Tuesday (Sept. 23) that it is selling 45 percent of its operation to a consortium led by KKR with the Canada Pension Plan Investment Board for $10 billion in cash.
The deal implies an equity value of $22.2 billion and an enterprise value of $31.7 billion for Sempra. The deal will give the KKR/CPP consortium a 65 percent interest in Sempra Infrastructure Partners, with Sempra retaining a 25 percent interest. Abu Dhabi Investment Authority will keep its existing 10 percent stake.
In a separate but related transaction, Sempra announced a Final Investment Decision to proceed with the $12 billion development and construction of its LNG export operation at Port Arthur Phase 2. Funding for the Phase 2 development includes $7 billion in equity investments by Blackstone Credit & Insurance along with KKR, Apollo Management funds and Goldman Sachs Private Credit which, together, would hold a 49.9 percent stake. Sempra would continue to hold the remaining 50.1 percent controlling interest.
Phase 2 is already subscribed with 20-year offtake agreements with ConocoPhillips, EQT and JERA.
Sullivan & Cromwell is legal advisor to Sempra on both transactions with the addition of Baker Botts on the Port Arthur Phase 2 FID.
On the Sempra equity investment, Simpson Thacher & Bartlett is advising KKR. Kirkland & Ellis is advising CPP Investments.
On the financial side, BofA Securities is advising Sempra, with Goldman Sachs serving as Sempra structural advisor on the Port Arthur deal. Citi is advising KKR.
Sempra is expected to receive 47 percent of the $10 billion cash payment at the expected Q2 or Q3 2026 closing and another 41 percent by year-end 2027, and the balance paid within seven years of closing.
Jeffrey Marin, chairman and CEO of Sempra, said the deals will reduce risk and sharpen company focus in an intense energy and power market.
“The transactions announced today further Sempra’s corporate strategy by advancing the company’s capital recycling program and transition to a leading U.S. utility growth business,” Martin said.
The Simpson Thacher team advising KKR is led from Houston by partners Breen Haire, Shamus Crosby and Ana Sanchez, along with Houston M&A associates Mark Kunzman, Houston Morgan, Braxton Duhon, Cameron Jones, Farzin Khoshravan, Alberto Aradillas, Andrew Waldeck, Charles Ritger, Hayden Stoeber and Wade Landry. Partners Brian Steinhardt (New York) and Brandon Barton, and associates Avi Tennenberg (New York), Michael Hiestand and Kyle Zollinger (Houston) on credit; Partner Nancy Mehlman, and associates Ruoxi Zhang and Jiha Min (New York) advised on taxes; Counsel Dennis Loiacono and associate Helene Marie Snyder (New York) on real estate; partners David Rubinsky (New York) and Jana Hymowitz (New York), and Associate Matias Botto on compensation and benefits; senior counsel Michael Isby and counsel Timothy Mulvihill (New York) advised on environmental matters; and partner Caroline Geiger, and associates Chandler Gerard-Reimer and Isabella Gonzalez on IP issues.
The Kirkland team advising CPP is being led by partners Kevin Crews from Dallas and Allan Kirk and Jack Chadderdon in Houston. Lucas Spivey (Houston) and Charles Martin (Houston) advised on debt finance; David Wheat (Dallas), Steve Butler (Austin) and Joe Tobias (Dallas) on tax; Pat Corrigan (Houston) and Ahmed Alrikhaimi (Houston) on real assets; Damien Lyster (Houston on energy regulatory; Michael Rigdon (Houston) on capital markets; Jim Dolphin (Houston) on environmental matters; Stephen Jacobson (Houston) on compensation; Christie Alcala (Houston) on employment and labor and Justin Coddington (Houston) on benefits.