The acquisition is expected to enable APUC to expand its regulated footprint in an OECD country
The deal is anticipated to be closed in 2020.(Credit: rony michaud from Pixabay)
Algonquin Power & Utilities (APUC) has signed an agreement to acquire 53.5% stake of Chilean water and wastewater utility, Empresa de Servicios Sanitarios de Los Lagos SA, or ESSAL, for $92.3 million.
The Chilean water company approximately has 230,000 connections in southern Chile. IT operates 48 potable water production systems, 29 sewage plants and 4,100km of distribution and sewage networks covering 33 municipalities across three regions.
To acquire the remaining stake in ESSAL, APUC will launch a tender offer process, which is required as per the local regulation.
APUC’s CEO Arun Banskota has said that “The acquisition of ESSAL supports APUC’s strategic growth program and broadens our regulated footprint into a historically stable and foreign investment-friendly OECD country with a robust regulatory framework.
“As APUC’s first international water utility, ESSAL will benefit from our core competency of responsible utility ownership, as well as leverage our best practices of safety, operational excellence, and innovation. We are excited with this opportunity to serve the water needs of our Chilean customers.”
ESSAL will be run by its existing team after deal closure
The acquisition is expected to present an opportunity for APUC to expand its regulated footprint in Chile, an investment-grade OECD country.
Following the completion of the transaction, ESSAL’s existing management team is anticipated to continue to run the business.
The deal is anticipated to be closed in 2020.
Holding nearly $11bn of total assets, APUC is a diversified international generation, transmission, and distribution utility.
In July, it partnered with Chevron U.S.A, a wholly owned subsidiary of Chevron, to co-develop 500MW of renewable energy projects. The first of the planned renewable power projects will be located on Chevron land.