Sempra Energy, RBS agree to sell European and Asian commodity operations to J.P. Morgan
SAN DIEGO, Feb. 16, 2010 – Sempra Energy (NYSE: SRE) today announced that it and The Royal Bank of Scotland (RBS) have agreed to sell the European and Asian operations of their RBS-Sempra Commodities joint venture to J.P. Morgan Chase & Co. (NYSE: JPM) for an expected $1.7 billion, subject to distributions prior to closing.
The final purchase price will be determined at the close of the transaction, based on the tangible book value of the business, plus a fixed premium of $468 million. Sempra Energy’s share of the sale proceeds is expected to be approximately $940 million.
Through the transaction, J.P. Morgan will acquire RBS Sempra Commodities’ global metals and oil businesses, and European natural gas and power businesses. RBS Sempra Commodities will retain its North American natural gas and power businesses.
“This transaction maximizes the market value of our European and Asian businesses and represents a positive first step of an orderly exit by RBS from the joint venture,” said Donald E. Felsinger, chairman and chief executive officer of Sempra Energy.
Sempra Energy has retained J.P. Morgan as its financial advisor to review potential alternatives for the remaining businesses.
In November 2009, RBS announced its intention to divest its share of the joint venture, following a directive from the European Union to dispose of certain assets.
The transaction will require approvals from the U.K. Financial Services Authority, the Swiss government (if necessary) and various antitrust regulators, including approval under the U.S. Hart-Scott-Rodino Act. The transaction is expected to be completed in the second quarter 2010.
Sempra Energy’s senior management will host a conference call at 10:30 a.m. EST today to discuss the transaction. Access is available by logging onto the Web site at www.sempra.com. For those unable to log onto the live webcast, the teleconference will be available on replay a few hours after its conclusion by dialing (888) 203-1112 and entering passcode 4482484.
Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2008 revenues of nearly $11 billion. The Sempra Energy companies’ 13,600 employees serve more than 29 million consumers worldwide.
This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by words like “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “may,” “would,” ”could,” “should,” or similar expressions, or discussions of strategies, plans or intentions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future results may differ materially from those expressed in the forward-looking statements. Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others: local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions by the California Public Utilities Commission, California State Legislature, California Department of Water Resources, Federal Energy Regulatory Commission, Federal Reserve Board, and other regulatory and governmental bodies in the United States and other countries where the company does business; capital market conditions and inflation, interest and exchange rates; energy and trading markets, including the timing and extent of changes and volatility in commodity prices; the availability of electric power, natural gas and liquefied natural gas; weather conditions and conservation efforts; war and terrorist attacks; business, regulatory, environmental and legal decisions and requirements; the status of deregulation of retail natural gas and electricity delivery; the timing and success of business development efforts; the resolution of litigation; and other uncertainties, all of which are difficult to predict and many of which are beyond the control of the company. These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the Securities and Exchange Commission. These reports are available through the EDGAR system without charge at the SEC’s Web site, www.sec.gov and on the company’s Web site, at www.sempra.com.
Sempra Pipelines & Storage, Sempra Generation, Sempra LNG and RBS Sempra Commodities dba Sempra Energy Solutions and Sempra Energy Trading are not the same companies as the utility, San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra Pipelines & Storage, Sempra Generation, Sempra LNG and RBS Sempra Commodities dba Sempra Energy Solutions and Sempra Energy Trading are not regulated by the California Public Utilities Commission.