SAN DIEGO, Sept. 20, 2010 – Sempra Energy (NYSE: SRE) and The Royal Bank of Scotland (RBS) today announced that Noble Group Ltd. has agreed to acquire the San Diego-based Sempra Energy Solutions unit of the RBS-Sempra Commodities joint venture for $317 million in cash, plus assumption of $265 million in debt.
This transaction represents the beginning of the second phase of the RBS Sempra Commodities asset sales. In July, Sempra Energy and RBS completed the first phase of the asset sales with a transaction to sell to JP Morgan Chase & Co. the joint venture’s global metals and oil businesses, as well as the European natural gas and power businesses, for approximately $1.6 billion. Sempra Energy and RBS are in advanced negotiations for the sale of the last remaining assets of the joint venture, the North American wholesale power and natural gas business, which is based in Connecticut.
“With this sale of Sempra Energy Solutions and advanced negotiations underway for the remaining North American operations of RBS Sempra Commodities, we are on track with our plan to exit the commodities business,” said Donald E. Felsinger, chairman and chief executive officer of Sempra Energy.
Sempra Energy Solutions is the U.S. retail commodity marketing arm of RBS Sempra Commodities. With approximately 200 employees, Sempra Energy Solutions markets energy to commercial and industrial customers in 16 states.
The transaction, which will require regulatory approvals from the Federal Energy Regulatory Commission and under the Hart-Scott-Rodino Act, is expected to close in the fourth quarter 2010.
Sempra Energy expects its share of the proceeds from the sale of all of the joint venture’s businesses and related cash distributions to total $1.8 billion to $1.9 billion. These distributions are net of expected transactional transition costs and are not expected to fully recover the goodwill included in the carrying value of Sempra Energy’s investment in the joint venture. Accordingly, Sempra Energy also expects in the third quarter 2010 to reduce its investment in RBS Sempra Commodities, resulting in an after-tax charge ranging from $50 million to $150 million.
“Our development of the commodities business has been a very successful enterprise,” Felsinger said. “After more than a decade of consistent growth, we expect to exit the business with approximately $3.5 billion in cash on an initial investment of $260 million.”
Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2009 revenues of more than $8 billion. The Sempra Energy companies’ 13,800 employees serve about 29 million consumers worldwide.
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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 free-of-charge on the SEC’s website, www.sec.gov, and on the company’s website 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.