Sempra Sells $10B Stake in Sempra Infrastructure Partners to Refocus on Regulated Utilities

Big infrastructure deal with KKR, CPP Investments signals pivot away from non-regulated energy assets

Sempra has agreed to sell a 45% equity interest in its energy infrastructure business, Sempra Infrastructure Partners, to affiliates of KKR and CPP Investments for $10 billion. The transaction values the unit at about $22.2 billion in equity and $31.7 billion on an enterprise basis. Sempra will retain 25%, while Abu Dhabi Investment Authority holds the remaining 10%. Closing is expected in Q2–Q3 2026.

Details of the Deal & Strategic Rationale

• KKR’s affiliate and CPP Investments will become majority owners (65%) of Sempra Infrastructure Partners. Sempra retains 25%, ADIA holds 10%.
• Cash proceeds: about 47% at closing, 41% by end-2027, rest in approximately seven years with stepped interest rates.
• The deal is part of Sempra’s broader strategy to simplify its portfolio, reduce exposure to non-regulated assets, strengthen its credit profile, and focus more on its regulated utility business in Texas and California.
• It also supports earnings per share (EPS) growth, projected accretion of about $0.20 per share annually starting 2027.

Market & Financial Implications

• This transaction helps Sempra recycle capital: it allows the company to fund growth in its regulated utilities without issuing additional equity, thus avoiding shareholder dilution.
• With much of its earnings moving toward regulated utilities, its financial risk profile is expected to improve. Investors often favor predictable cash flows, so this shift could lower its risk premium.
• The involvement of KKR and CPP brings in institutional infrastructure capital, which could accelerate development of LNG / gas infrastructure projects under the Sempra Infrastructure Partners umbrella.

Risks & What to Watch

• Regulatory approvals: The deal is contingent on regulatory clearance; any delays or opposition could push the closing timeline into later 2026.
• Execution & integration risk: As ownership shifts, managing partnerships among KKR, CPP, ADIA, and Sempra in operating infrastructure assets (e.g. LNG export pipelines/storage) will be key.
• LNG market volatility: Because Sempra Infrastructure Partners has exposure to LNG infrastructure, global energy market swings (prices, demand, regulation) remain a risk.
• Interest & financing structure: Part of the $10B proceeds is delayed and involves interest-bearing payments. Cost of capital and interest rate environment will affect net benefit.

In summary, Sempra’s sale of 45% of its infrastructure platform to KKR & CPP for $10B signals a major rebalancing: moving from complex non-regulated energy assets toward a business model focused on regulated utilities and more stable returns. The core theme: simplifying the business, strengthening finances, and doubling down on regulated utility growth.