Petrobras Receives Only Two Bids for Liquigás, LPG Distributor

Investors May Have Been Deterred By Changes In The LPG Distribution Announced By The Government And Petrobras, Such As The End Of Brand Exclusivity

The deadline for receiving proposals from interested parties ended last Friday (08/16), and contrary to the interest of large business groups and investment funds, Petrobras received only two bids for Liquigás, its subsidiary for the distribution of liquefied petroleum gas (LPG) cylinders. As for Piped Gas, six companies will compete with Petrobras for the distribution of Gas in the Central-South region.

The Bidders

Unofficial information indicates that only the Arab fund Mubadala and the consortium formed by Itaúsa and Copagaz have submitted binding offers for the purchase of the distributor.
The activity in the months leading up to the proposal submissions was substantial, with companies and investment funds trying to form the consortia.

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However, some companies withdrew from the Petrobras competition, such as the Dutch SHV Energy, owner of the distributor Supergasbras.

The company, a giant in the sector and holding 19.7% of the market, was negotiating the formation of a consortium with GP Investments, but the creation of the company did not move forward, just like SHV, which was negotiating the creation of a consortium with the distributor Consigaz, which has 8.6% of the market, but also withdrew.

There is speculation in the market that the reason for the withdrawals may have been the package of changes announced by the government in the LPG distribution market.
Changes such as the sale of fractional gas cylinders and the end of exclusive branding of the cylinders may have been the reasons behind the decrease in interest from potential buyers, as these changes were not adequately detailed by the government.

Liquigás is the second-largest LPG distributor in the country, and the government estimated to raise around R$ 3 billion with the sale of Petrobras’s subsidiary.
After negotiations with the two competitors, the winning proposal will be taken to the board of directors for a final decision.

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