BP to sell US onshore wind business to LS Power for undisclosed sum
(Reuters) -BP has agreed to sell its U.S. onshore wind business to U.S.-based LS Power, as part of its ongoing divestment strategy, the energy major said on Friday, without disclosing a deal value.
bp Wind Energy will be owned and operated under power and energy-focused investment and operating company LS Power's Clearlight Energy.
BP has come under criticism from investors for its underperformance in recent months, leading to a strategy revamp with promises to cut debt, increase cash flow and a major pivot back to oil and gas after an ill-fated foray into renewables.
The company is targeting $3 billion to $4 billion in disposals by the end of this year. It has pledged to divest $20 billion worth of assets by 2027 under CEO Murray Auchincloss' plans.
"The absence of consideration in the press release is unusual given the potential size of the transaction," HSBC analyst Kim Fustier said.
"This may suggest that the portfolio could be worth less than typical multiples for onshore wind assets," Fustier said, adding that another disposal will likely be needed to reach the disposal target this year.
BP struck a deal with Apollo Global Management in March to sell its stake in a firm invested in the TANAP gas pipeline linking Azerbaijan and Turkey for $1 billion.
The deal comprises 10 operating wind assets with a combined gross generating capacity of 1.7 gigawatts, BP said.
The acquisition will increase Clearlight Energy's operating fleet to about 4,300 megawatts, LS Power said.
Shares of the London-listed company were up 1.9%, with other energy companies also tracking a rise in oil prices.
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