July 21, 2020 / 1:14 AM / 25 days ago

Petrobras sells remaining 10% stake in TAG to Engie Brasil, CDPQ

FILE PHOTO: A logo of Brazil's state-run Petrobras oil company is seen at their headquarters in Rio de Janeiro, Brazil October 16, 2019. REUTERS/Sergio Moraes/File Photo

BRASILIA (Reuters) - Brazil’s state-owned oil company Petrobras (PETR4.SA) on Monday agreed to sell its remaining 10% stake in natural gas pipeline company TAG to Engie Brasil (EGIE3.SA) and Canadian investment fund Caisse de Depot et Placement du Quebec (CDPQ).

The sale is worth 1 billion reais ($187.5 million), Engie said, and follows the $8.6 billion sale last year by Petrobras of the other 90% of TAG to the same group.

In a securities filing, Petrobras said the deal is in line with its “portfolio optimization” strategy, improving its capital allocation, and maximizing value for shareholders.

Engie Brasil, the Brazilian subsidiary of France’s Engie SA (ENGIE.PA), said in a statement that the 1 billion reais was paid in full to Petrobras on Monday.

Privatization Secretary Salim Mattar said the deal was further evidence of the state reducing its footprint in key sectors and paving the way for more competition.

“The transaction represents another important milestone for the opening of the natural gas sector in Brazil, and is in line with the strategy of optimizing the company’s portfolio, and the government’s policy of privatization and economic liberalization,” Mattar tweeted.

Reporting by Jamie McGeever, Sabrina Valle and Roberto Samora; Editing by Muralikumar Anantharaman and Kenneth Maxwell

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