New Fortress Acquires Golar Units for $5bn: Update
US LNG developer New Fortress Energy (NFE) announced on January 13 it had agreed to buy Hygo Energy Transition and Golar LNG Partners (GMLP), two subsidiaries of Bermuda-registered LNG shipping group Golar LNG, for a combined $5bn.
NFE will buy 100% of Hygo, a joint venture between Golar LNG and US investment firm Stonepeak Infrastructure Partners. Formerly known as Golar Power, Hygo was set up in 2016 to develop LNG-based transportation and power infrastructure. The business controls a floating storage and regasification unit (FSRU) in Sergipe, Brazil, and a 50% interest in a 1,500-MW power plant that receives its gas. It has two other planned FSRUs due to support 1,200 MW of power generation in Brazil. Hygo's fleet also includes two LNG carriers (LNGCs).
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Through its 100% takeover of Golar LNG Partners, NFE will also gain a fleet of six FSRUs and four LNGCs, as well as a 50% interest in the Hilli Episeyo floating liquefaction vessel.
"The addition of Hygo will quickly expand our footprint in South America with three gas-to-power projects in Brazil’s large and fast-growing market," NFE CEO Wes Edens commented. "With GMLP, we gain LNG ships and world-class operators that are an ideal fit to support our existing terminals and robust pipeline."
The closure of the transactions is expected sometime in the first half of this year. Under the Hygo deal, NFE will provide 31.4mn in shares of its common stock and $580mn in cash, with the acquisition's enterprise value estimated at $3.1bn. The company will pay for GMLP in only cash, with that deal having an enterprise value of $1.9bn.