Sempra SELLS OFF Its Export “Crown Jewel” to The KKR and “Canadian Retirement Mafia” For $10B…

Sempra shareholders be like… “It’d be a lot cooler if you didn’t…” 

Big news, Sempra just sold off a 45% equity stake of its infrastructure arm (a.k.a. the one with all the sexy assets like Gulf Coast LNG, Mexican gas pipes, and renewables they never really cared about) to KKR and the Canadian retirement mafia for $10 billion. The sale values the whole business at $31.7B, but what it really says is: Sempra doesn’t want to be interesting anymore.

(Source: Giphy)

In short, the spin is to “simplify the business model, strengthen the balance sheet.” But what it really means is fck international diversification, screw global LNG arbitrage, and go back to being a boring California and Texas utility that regulators can babysit. Case in point: Ninety-five percent of Sempra’s earnings will now come from U.S. regulated utilities. Which is like saying you’ve given up tequila shots for matcha tea. Sure, it’s safe. But you just gave away all the upside to private equity sharks and Canadian pensioners who will be laughing their tail off when LNG cash starts raining in 2029. 

(Source: WSJ)

Meaning, KKR just scooped up control of America’s crown-jewel export story while Sempra slinks back into San Diego to beg for rate hikes. With that said, the Abu Dhabi Investment Authority still owns 10%, which means the people supplying your printer paper in California are now in bed with oil princes and leveraged-buyout goons. Now please excuse me while I try explaining that to my boomer dad when he puts his tin foil hat on. 

But alas, Sempra’s management swears this is accretive, that the $0.20 per share boost starting in 2027 proves they “unlocked value.” Which, it might. We’ll see… especially since the structure of the deal lets Sempra dribble out the proceeds over several years. But given the potential that this infrastructure arm has… this feels more like a slowmotion pawnshop transaction rather than a disciplined capital allocation. 

(Source: Giphy) 

Which means… which means… the real story here is that Sempra is choosing safety over swagger. LNG projects are volatile, regulators hate them, and the cash flow timing is lumpy. But utilities are predictable, boring, and everyone gets paid. Analysts clap because the credit profile improves. Management claps because they no longer have to explain Mexico to Wall Street. And KKR claps because they just stole the future of American gas exports while Sempra downgraded itself into missionary position forever.

In the end, Sempra just sold its side hustle… a.k.a. The part of the business that could actually grow, actually print, actually matter on a global stage. And now? It’s 45% gone. So yeah, call it castration or call it smart… but the real winners are the Canadian retirees who don’t even have to pay U.S. capital gains tax on the win. Bigly. Until next time, friends…

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.