Petrobras completes the acquisition of Gas Brasiliano Distribuidora for $271 million

Petrobras Gás S.A. (Gaspetro) completed the acquisition of Gas Brasiliano Distribuidora (GBD), a natural gas distribution utility operating in the northwestern region of the state of São Paulo. The operation was concluded this Friday, July 29. Previously, the utility was controlled by Italy's ENI International B.V.

The transaction was worth approximately $271 million after adjustments for working capital variations provided for under the share purchase agreement signed by Gaspetro and ENI. The final amount is still subject to adjustments related to working capital existing on July 31, 2011.

GBD holds an exclusive concession for natural gas distribution activities in the northwestern state of São Paulo, in an area encompassing 375 municipalities. It supplies the region's industrial, commercial, residential and transportation needs.  In 2010, the company's distribution network added up to 755 km, and it traded some 650 thousand cubic meters of gas per day. The investments foreseen under GBD's business plan, as approved by the State of São Paulo Sanitation and Energy Regulation Agency (ARSESP) in the company's latest tariff review, are expected to reach at least R$106.2 million in the five-year period ranging from 2010 to 2014. They are expected to be used to expand the distribution network and to grow the company's sales to 1.2 million cubic meters per day by 2014. GBD's 30-year concession agreement began in December 1999, and may be extended for 20 years.

This acquisition will position Petrobras in the distribution segment in the largest Brazilian natural gas market, which is located near the entrance of the gas supplied by Bolivia and transported over the GASBOL, and close to the gas reserves in Southeastern Brazil, including those coming from the pre-salt area.

As announced in a statement to the market issued on May 27, 2010, Petrobras, through its subsidiary Petrobras Gás S.A., signed an agreement to acquire the totality of the shares of GBD with ENI International B.V. The transaction was subject to approval by the relevant regulatory bodies in Brazil. With the consent of ARSESP, granted on April 19, 2011, and the signing of the addendum to GBD's concession agreement, on July 18, 2011, all conditions precedent were met, and the transaction, as provided for in the agreement, was closed today. The operation had already been approved by the Administrative Council for Economic Defense (CADE) on December 15, 2010.