Main

Acquisition of Gas Distribution Business in Brazil

Oct. 26, 2015


Main Contents

Mitsui & Co., Ltd. ("Mitsui", Head Office: Tokyo, President & CEO: Tatsuo Yasunaga) entered into a Share Purchase Agreement with Petróleo Brasileiro S.A. ("Petrobras"), a Brazilian state-run oil company, on October 23rd, 2015, concerning partial acquisition of shares in Petrobras Gás S.A ("Gaspetro"), which has equity stakes in local gas distribution companies ("LDCs") in 19 Brazilian states. After meeting the necessary conditions precedent, including the approval by competent authorities, Mitsui will acquire 49% of Gaspetro shares through Mitsui Gas e Energia do Brasil Ltda ("Mitsui Gas") for a purchase price of approximately R$1.9billion (¥67 billion) (*1).

In 2006, Mitsui acquired Mitsui Gas, which has equity interests in LDCs in seven states. In the nine years since then, Mitsui and Mitsui Gas have worked to improve the gas distribution infrastructure in Brazil and ensure stable supplies of gas through LDCs' business. In December 2014, Mitsui acquired an equity interest in Companhia de Gas do Ceara S.A., an LCD based in the State of Ceará in northern Brazil thorough Mitsui Gas. Mitsui is currently engaged in gas distribution operations in eight Brazilian states. The acquisition of shares in Gaspetro will increase the number of states served by gas companies in which Mitsui Gas has an equity interest to 19 (*2), and the amount of gas supplied by those companies to 30 million cubic meters per day within Brazil.

The gas distribution business in Brazil consists of regional monopolies based on the concessions granted by state governments. Under concession agreements signed with state governments, distribution companies develop the gas distribution infrastructure in their service areas in each state, including gas pipeline networks, while distributing gas purchased from Petrobras to power stations and general industrial and commercial users, as well as residential consumers. They also distribute gas for use as fuel for natural gas vehicles. Gaspetro, in which Mitsui through Mitsui Gas will hold a stake, has built a well-balanced portfolio spanning several regions, including central, northeastern, and southern Brazil. Gas demand is expected to grow in step with economic development in all of these regions.

Mitsui and Mitsui Gas will use knowledge and expertise gained from the business operations to contribute to energy-related businesses through its gas distribution operations in Brazil in partnership with Petrobras and state governments.

(*1) This is the estimated purchase price, taking into account adjustments under the agreement terms, assuming that the agreement will take effect at the end of December 2015.
(*2) The 19 LDCs affiliated to Gaspetro include 8 LDCs in which Mitsui Gas has an equity interest.

Profile of Gaspetro

Company Name Petrobras Gás S.A. (Gaspetro)
Head Office Rio de Janeiro, Brazil
Established 1992 (Operation 1994)
Ownership (before investment by Mitsui/Mitsui Gas) Petrobras 100%
(after investment) Petrobras 51%, Mitsui Gas 49%
Business Outline Gas distribution service in Brazil
Concession contract : 50 years at maximum (-2044)

Investment Structure

Investment Structure

List of 19 LDCs

Please scroll horizontally to look at table below.

  Name of Company State
11
LDCs
1 Gas Brasiliano Sao Paulo
2 Potigas Rio Grande do Norte
3 Msgas Mato Grosso do Sul
4 Sulgas Rio Grande do Sul
5 Cegrio Rio de Janeiro State
6 Gasmar Maranhao
7 Gaspisa Piaui
8 Goiasgas Goias
9 Cebgas District of Federal
10 Gasap Amapa
11 Rongas Rondonia
8
LDCs
12 Algas Alagoas
13 Bahiagas Bahia
14 Compagas Parana
15 Copergas Pernambuco
16 Pbgas Paraiba
17 Scgas Santa Catarina
18 Sergas Sergipe
19 Cegas Ceara

LDC Map

LDC Map

Notice:
This announcement contains forward-looking statements. These forward-looking statements are based on Mitsui's current assumptions, expectations and beliefs in light of the information currently possessed by it and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, financial position or cash flows to be materially different from any future results, financial position or cash flows expressed or implied by these forward-looking statements. These risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest Annual Securities Report and Quarterly Securities Report, and Mitsui undertakes no obligation to publicly update or revise any forward-looking statements.
This announcement is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.

Information

For inquiries on this matter, please contact

Mitsui & Co., Ltd.
Investor Relations Division
Telephone: +81-3-3285-7910
Facsimile: +81-3-3285-9821
infoTKADZ@mitsui.com
Mitsui & Co., Ltd.
Corporate Communications Division
Telephone: +81-3-3285-7596
Facsimile: +81-3-3285-9819