US utility CMS Energy Corp, and Swiss engineering and technology group ABB have agreed to sell power assets worth $1.39 billion to state-controlled Abu Dhabi National Oil Co (Taqa).
Dearborn, Michigan-based CMS said on Tuesday it would sell its stakes in businesses in the Middle East, Africa and India to United Arab Emirates-based Taqa for $900 million to focus on investments in its Michigan utility.
ABB said it would to sell its stakes in a power project in Morocco and another in India for $490 million as it pushes ahead with the divestment of its non-core businesses. ABB and CMS are partners in the two plants, said Taqa, the largest utility in the UAE by market value.
The acquisitions, which will be completed before August, "support our drive for international growth," Peter Barker-Homek, Taqa's chief executive said in a statement.
Barker-Homek told Reuters in October Taqa planned to spend as much as $3.5 billion on foreign acquisitions and investments as the Gulf Arab emirate seeks to use last year's record oil earnings to diversify its sources of revenue and cushion itself against a decline in world crude prices.
"We are still staying on that target and could invest up to $1 billion till October," Barker-Homek told Reuters by telephone on Tuesday. He declined to give details. Since October, the Abu Dhabi-listed company has agreed to buy assets worth a total $2.63 billion, including the CMS and ABB stakes.
Earlier this month it completed the purchase of BP Plc's Dutch gas assets for $694 million and agreed in January to buy some North Sea oil properties and assets from Canada's Talisman Energy Inc for $550 million.
Separately, it said in November it will invest as much as $1 billion jointly with India's Infrastructure Leasing & Financial Services Co to build power plants in India, the world's second-most populous nation.
Its first project will be a $125 million investment in helping build a power plant in the north-eastern state of Tripura, with the start of construction set for before July, Barker-Homek told Reuters. He did not give more details. The acquisition of CMS unit CMS Generation Co gives Taqa full control over a power and water plant in Abu Dhabi and a bigger stake in a second facility.
Other businesses included in the sale are CMS's stakes in Jorf Lasfar Energy Co in Morocco, Jubail Energy Co in Saudi Arabia, Takoradi International Co in Ghana and ST CMS Co in India, CMS said. The purchase boosts Taqa installed power generating capacity by about 60 percent to 11,500 megawatts.
J.P. Morgan Chase & Co advised CMS on the sale, the proceeds of which will be used to retire some debt of its parent company and for general corporate purposes, the company said.
The ABB transaction included a 50 percent holding in Jorf Lasfar, a 1,356 megawatt coal-fired power plant south-west of Casablanca, and a 50 percent stake in the Neyveli Project, a 250 megawatt lignite-fuelled power station in the Indian state of Tamil Nadu, the group said.
"The move is part of our ongoing divestment of non-core businesses, as we continue to focus on our power and automations technologies," Chief Financial Officer Michel Demare said in a statement. ABB last week said it was selling its Lummus Global business, which analysts said could generate up to $600 million for ABB.
Taqa's fourth-quarter profit rose 39.1 percent to 195.94 million dirhams ($53.35 million) after it took control of its sixth power and water plant in the UAE in September, boosting revenue.