Skip to main content

Energy and Resources Caisse joint bid for Petrobras pipeline strengthens as competing bidders drop out

At least three investors left separate groups interested in acquiring a gas network pipeline that will be sold by Brazil’s state-controlled oil company Petroleo Brasileiro SA, three sources with knowledge of the matter said.

Those departures will likely leave a third group, led by France’s Engie SA with Canadian pension fund Caisse de Depot et Placement du Quebec, stronger. The final bids for TAG, as the unit is known, are due on Tuesday.

After the previously reported departure of Australia’s Macquarie Group Ltd from one of the groups, which still includes Brazilian investment firm Itausa Investimentos SA and Singapore sovereign wealth fund GIC, the other two investors that were supporting the bid, sovereign wealth fund Abu Dhabi Investment Authority, known as Adia, and investment manager Wren House Infrastructure, also pulled out.

Story continues below advertisement

A second group, led by Mubadala Investment Company and EIG Global Energy Partners, had been in talks with the world’s largest investment firm, BlackRock Inc, but the company gave up.

Wrenhouse, Adia, EIG, Mubadala and Itausa did not immediately comment on the matter. BlackRock, which would have a small stake in TAG, declined to comment.

The weakening of the Itausa Investimentos and Mubadala groups raises the chance of Engie, which was the winner of the first bid round, winning the deal. It is not clear if the three groups will deliver the proposals as it was previously expected.

The sale of TAG is expected to be the largest divestment in Petrobras’ asset sale program. The oil company expects to fetch around $8 billion.

All bids were expected to use a large amount of debt to finance the acquisition, as banks are eager to fund the pipeline, which has an extremely stable cash flow. Still, last-minute changes in the group complicate the financing, one of the sources said.

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter