China Yangtze to buy Peru's largest electric company for $3.59 bln

China Yangtze Power International (CYP) has agreed to buy Peru's largest electric company Luz del Sur from Sempra Energy for 3.6 billion U.S. dollars, both companies confirmed on Monday.

Infinitive data shows that the deal is the biggest acquisition made by a Chinese state-owned enterprise in the Americas since 2015.

Sempra said the cash deal, which includes a near 84 percent stake in Lima-based Luz del Sur, has to be approved by the Peruvian anti-trust agency and the Bermuda Monetary Authority. The deal is expected to be completed in the first quarter of 2020. 

Sempra also announced in the statement that its subsidiary Sempra LNG has entered into a memorandum of understanding with China Three Gorges Corporation (CTG), the parent company of CYP, over potential cooperation in supplying liquefied natural gas (LNG) to support demand growth in China, including the growth of natural gas power generation.

"This initial agreement with CTG represents an opportunity to support strong growth in natural gas demand in Asia, with future expansions of our LNG projects right here in North America," said Jeffrey W. Martin, chairman and CEO of Sempra Energy.

Sempra intends to use the deal proceeds to bolster its balance sheet and fund capital needs for its core utilities in California and Texas, Martin said in the statement.

The company says an active sales process continues for its electric businesses in Chile, and it expects to announce an agreement during the fourth quarter.

Since the announcement to sell the South America businesses, Sempra's shares rose by about 28 percent before market close.