Brazil’s state-controlled oil company Petroleo Brasileiro SA on Thursday received three binding bids for its gas pipeline network company Transportadora Associada de Gás SA (TAG), three sources with knowledge of the matter said.
The bids were from groups led by Australia’s Macquarie Group, United Arab Emirates’ sovereign wealth fund Mubadala Development Co and France’s power company Engie SA, the sources said.
Petrobras, which is selling 90 percent of its stake in TAG, and the bidders did not immediately comment on the matter.
The sources added all bids were higher than the US$5.2 billion Canada’s Brookfield Asset Management paid in 2016 for another gas pipeline unit sold by Petrobras, Nova Transportadora do Sudeste (NTS). Some of the proposals could be above US$7 billion, the sources added.
The sale of TAG is part of a program of asset sales with a US$21 billion target in 2017-2018, as Petrobras seeks to reduce its US$95 billion debt pile, the largest in the global oil industry.
Macquarie, the world’s largest manager of infrastructure investment funds, has partnered with Canada Pension Plan Investment Board, Singapore’s sovereign wealth fund GIC Pte LTd, and two Brazilian investment firms. Mubadala has joined EIG Global Energy Partners LLC. It is unclear if Engie has a partner.
At least two consortia will finance their bids with loans from international banks. Merger and acquisition financing is growing in Brazil as interest rates reach their lowest level ever.
Petrobras will analyze the bids, which included financing commitments and contracts, but has not informed the bidders of the deadline for a decision.
Update: Reuters in December reported the three bidding groups had submitted proposals to acquire TAG, which owns 4,500 kilometres (2,800 miles) of pipelines in northeast Brazil.
(Reporting by Carolina Mandl and Tatiana Bautzer; Editing by Sandra Maler and Cynthia Osterman)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo courtesy of Reuters/Paulo Whitaker