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Shell to sell its entire stake in Brazil’s Comgas for $380m

EBR Staff Writer Published 11 October 2017

Royal Dutch Shell has signed an agreement to divest its entire 16.8% stake in a Brazilian gas distribution company, Companhia de Gas de São Paulo (Comgás), to Brazilian energy company Cosan for $380m.

Under the terms of the deal, Shell will exchange its about 21.8 million common shares in Comgás for Cosan shares and cash.

The divestment is part of Shell’s efforts to focus on other areas of the country's energy sector.

Shell integrated gas and new energies director Maarten Wetselaar said: “This transaction allows us to focus our efforts in Brazil on areas where we see the most strategic value for Shell longer-term.

“Brazil is an important country to Shell, and our portfolio of high quality assets and development opportunities positions us well for the future.”

Scheduled to be completed by the end of this year, the transaction is subject to customary closing conditions, regulatory approvals and certain consents.

The deal, however, is not expected to affect Shell’s existing operations in Brazil. The firm will retains its operations including Deep Water portfolio and downstream business, including participation in Brazil’s biofuel producer Raízen.

Brazil’s piped natural gas distribution company, Comgás operates over 14,000km of pipeline and serves over 1.7 million customers.

Cosan has 63.4% interest in Comgás while the remaining share is owned by public investors.