Shell and minority shareholder Bechtel are selling InterGen and ten power plants in the UK, the Netherlands, Mexico, the Philippines, China and Australia, for $1.75 billion.
The deal reflects the current trend in the energy sector for retreating back to core operation. As with many other oil-focused companies, Shell will look to redirect its cash from such areas as power generation back to its oil operations, which have taken a battering of late as errors in oil reserve accounting and a poor replacement ratio have dented shareholder confidence.
However, the Shell/Bechtel partnership has not divested all of its power production assets; the companies said in a statement that they are retaining seven facilities in the US, Columbia and Turkey.
AIG’s private equity division and Ontario Teachers’ will finance the acquisition equally.
