Blackstone said to offer $6 billion for Petrobras pipeline

By Cristiane Lucchesi and Paula Sambo on 12/1/2017

SAO PAULO (Bloomberg) -- Blackstone Group has teamed up with its Brazilian partner to compete for Petroleo Brasileiro SA’s natural gas pipeline network in the country’s northeast, said people with knowledge of the matter.

Blackstone and  Patria Investimentos Ltda are one of at least three groups that have made non-binding offers up to $6 billion to acquire the asset, the people said, asking not to be named because the discussions are private. Mubadala Development and EIG Global Energy Partners also made an initial offer for the 90% stake in Transportadora Associada de Gas SA, as well as a consortium led by French Energy company Engie SA, according to the people.

Banco Santander SA is advising Rio de Janeiro-based Petrobras on the deal and it should close before the end of the first half of 2018, according to the people.

Brazil’s improving economy has spurred more competition for the pipelines compared to the 2016 divestment of Nova Transportadoras do Sudeste, a similar pipeline network in the southeast, the people said. NTS was bought for $5.2 billion by a consortium led by Brookfield Asset Management that included Itausa - Investimentos Itau SA.

Petrobras, Blackstone, Patria and EIG declined to comment. Mubadala didn’t reply to e-mails and phone calls seeking comment. Engie is focusing on organic growth and acquisitions that adhere to its strategy to grow in Brazil’s gas market, focusing on the value chain and regulatory framework, a company spokeswoman said in an emailed response to questions. All assets available in the sector are being considered and looked at carefully, she said.

Petrobras CEO Pedro Parente has set an aggressive agenda to solidify the state-controlled company’s finances after the twin challenges of the oil rout and a corruption scandal dealt it a near-death experience. He is rushing to finish his work before an unpredictable presidential campaign next year makes it harder to sell assets.

Parente foresees signing $21 billion in asset sales in the next eight months, he said in a interview at Bloomberg’s office in New York earlier in November.

Peter Grauer, chairman of Bloomberg LP, is a non-executive director at Blackstone.

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