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Business deals

KKR takes 12% stake in Philippine power major First Gen for $190m

US buyout firm seeks bigger footprint in Asian infrastructure

First Gen produced 21% of the domestically generated electricity in the Philippines in 2019. (Photo courtesy of First Gen)

MANILA -- U.S. investment firm KKR has acquired an 11.9% stake in First Gen, a leading Philippine power producer, for 9.6 billion pesos ($193 million), in a move that expands in presence in Asian infrastructure.

The buyout fund originally aimed to acquire 6% to 9% of First Gen in a tender offer through June 24. But the offer price of 22.5 pesos per share, a roughly 27% premium, drew a more subscriptions than expected.

First Gen is the power-generating arm of the Lopez Group, the Philippine conglomerate headed by the Lopez family. First Gen accounted for 21% of domestic electricity production last year. Its portfolio includes natural gas plants as well as geothermal and hydropower stations.

"We have long viewed First Gen as an exceptional business with a high-caliber leadership team," David Luboff, a partner at KKR, said in a statement.

The Philippine producer has partnered with Tokyo Gas on plans to build the country's first liquefied natural gas terminals on the island of Luzon.

Federico Lopez, the chairman and CEO of First Gen, said he looks forward to engaging with KKR and other investors in pursuit of a "decarbonized future."

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