Brookfield buys Brazil pipeline system from Petrobras for US$5.2B
The pipelines will be operated by a subsidiary of Petrobras under a multi-year operations and maintenance contract
TORONTO—A consortium led by Brookfield Infrastructure has signed a deal to buy a controlling stake in a natural gas pipeline system in Brazil from Petroleo Brasileiro S.A. (Petrobras) for US$5.2 billion.
Under the deal, the consortium will acquire a 90 per cent stake in Nova Transportadora do Sudeste S.A. (NTS). Petrobras, Brazil’s state-run oil company, will hold a 10 per cent stake.
Brookfield says NTS has a 2,048-kilometre natural pipeline network in Brazil’s core industrialized regions.
Under the agreement, the pipelines will be operated by a subsidiary of Petrobras under a multi-year operations and maintenance contract.
Brookfield Infrastructure will have the ability move the pipelines to a fully stand-alone business if it wants.
The purchase price is payable in two tranches including US$4.3 billion due on the deal’s closing and the balance payable on the fifth anniversary of the completion of the agreement.
Brookfield Infrastructure says it will fund its share of the up-front payment from existing liquidity.
Brookfield Asset Management has agreed to participate initially for an approximate 30 per cent interest in the consortium.