Teekay LNG

History

2021: Stonepeak Infrastructure bought Teekay LNG for $6.2 billion

In early October 2021, the investment company Stonepeak Infrastructure announced the acquisition of the manufacturer of the tanker for transportation gas Teekay LNG for about $6.2 billion, taking into account the debts of the sold company. Under the terms of the agreement, the buyer will receive all issued and outstanding common shares of Teekay LNG. The company at the time of the announcement of the transaction owns 47 vessels for the transportation of liquefied natural gas (LNG) and 21 medium vessels for the transportation of liquefied hydrocarbon gases (LPG), as well as 7 multi-ton gas carriers.

As of September 27, 2021, spot LNG prices in Asia reached a record, as competition with European buyers worsens on the eve of peak demand in the winter season, when the level of reserves is already at a multi-year low. Demand for LNG fuel is projected to rise significantly in the coming years as countries reduce the use of dirtier fossil fuels such as coal and oil.

Stonepeak Infrastructure acquired Teekay LNG for $6.2 billion

This includes about 36.0 million ordinary units owned by Teekay Corporations and 100% of Teekay's ownership in Teekay GP, the general partner of Teekay LNG. The board of directors of Teekay GP and Teekay approved the deal, which will close by the end of 2021. Stonepeak Infrastructure will pay $17 per common share. This represents an enterprise value of $6.2 billion, including consolidated and proportional net debt of the joint venture and $1.5 billion in total capital value.

The acquisition cost is a premium of 8.3% to the closing price of Teekay LNG common units as of October 1, 2021 and a premium of 12.3% and 17.5% to the weighted average price of regular Teekay LNG units for the last 60 and 180 days, respectively. The transaction is subject to approval by a majority of Teekay LNG general stock holders at a special upcoming meeting. Teekay will also place Teekay LNG under the ownership of management services companies that currently operate for Teekay LNG and some of its joint ventures under existing management services contracts.

LNG tankers carrying gas to Asia cost about $70 thousand a day, while ships heading to Europe cost $64 thousand, according to Spark Commodities, which takes estimates from shipping brokers.^[1]

Notes