In 2016, both La Caixa and Repsol sold a 10% stake in Naturgy to Global Infrastructure Partners (GIP) , an infrastructure investor company, for a total outlay of €3.8 bln.
Naturgy is one of the largest energy infrastructure companies in the world, with operations in over 30 countries and more than 23 million customers. We were asked by GIP to provide regulatory and commercial due diligence relating to Naturgy’s gas and electricity network assets in Spain, Chile, Colombia, Brazil, Panama and Mexico.
Understanding the risks of diverse regulatory regimes
We provided advice on the crucial elements of the regulation of each of the businesses, analysing the major drivers of value and main risks. A key point was to identify the specificities of each jurisdiction, with different regulatory frameworks.
- Light-touch regulation in Chile, which is based on the ex-post analysis of the internal rate of return of the investor;
- The replacement value of assets used in several Latin American countries; and
- The unit payment per number of connections and amount of gas delivered, which applied in Spain.
Delivering relevant and timely advice
Our regulatory experience in Europe and Latin America was key to deliver our analysis in the required timeframe and our extensive experience in transactions also allowed us to focus on the most relevant aspects of the transaction. This allowed GIP to quickly gain a deep understanding of the risks and opportunities of the target asset.