US-based utility firm Duke Energy has agreed to sell a 19.7% indirect equity interest in Duke Energy Florida to infrastructure investor Brookfield in an all-cash deal valued at $6bn.
This transaction will be conducted through Brookfield’s Super-Core Infrastructure strategy and is set to enhance Duke Energy’s financial position.
This capital infusion aims to bolster Duke Energy’s operations in the electric and gas utilities sector and support its energy modernisation strategy. The investment is notably above Duke Energy’s current public equity valuation.
Of the $6bn proceeds, $2bn will contribute to Duke Energy’s expanded five-year capital plan, now totalling $87bn. The remaining $4bn proceeds will replace holding company debt.
Duke Energy president and CEO Harry Sideris said: “We’re pleased to have Brookfield, a highly regarded infrastructure investor, as a long-term partner in Duke Energy Florida.
“This significant transaction at a compelling valuation best positions Duke Energy to unlock additional capital investments in Duke Energy Florida during this unprecedented growth period.
“It also materially strengthens Duke Energy’s overall credit profile, which in turn enables us to invest in our energy modernisation plans across our entire footprint – all while helping keep prices as low as possible for our customers.”
Duke Energy Florida serves two million customers in central and western Florida. The $4bn increase in its five-year capital plan owing to the transactions, lifts total investments in the state of Florida to over $16bn by 2029.
These investments will focus on grid modernisation and enhancing generation capacity.
The acquisition involves Brookfield investing in Florida Progress, owner of Duke Energy Florida. The investment will occur in phases, with Florida Progress to receive an initial $2.8bn by early 2026, followed by $200m by late 2026.
The remaining amounts will be funded in subsequent years. Brookfield retains the option to expedite the full investment.
Following the transaction, Duke Energy will maintain an 80.3% stake in Duke Energy Florida and continue its operational management. Brookfield will gain rights aligned with its ownership percentage.
Brookfield infrastructure group CEO Sam Pollock said: “This transaction underscores our patient strategy of partnering with leading corporates and investing in essential infrastructure assets that underpin economic growth, and that generate stable long-term cash flows across market cycles.”
The deal awaits regulatory clearance from bodies including the Federal Energy Regulatory Commission and the Committee on Foreign Investment in the United States.
JP Morgan Securities and Skadden, Arps, Slate, Meagher & Flom are advising Duke Energy financially and legally, respectively. RBC Capital Markets and Kirkland & Ellis are advising Brookfield.
In other developments, Duke Energy had recently agreed to sell its Piedmont Natural Gas Tennessee business to Spire for $2.48bn.
