Brazil’s Petrobras said Thursday that it has agreed to sell its liquid petroleum gas subsidiary to Companhia Ultragaz for $830 million.

Petrobras said the deal has been approved by its board of directors.

Liquigás is a wholly-owned Petrobras subsidiary that bottles, distributes and trades liquefied petroleum gas (LPG).

Liquigás is present in almost all Brazilian states and has 23 operating centers, 19 warehouses, one road-railroad storage and loading base and a network of 4,800 authorized resellers.

Companhia Ultragaz is a subsidiary of Ultrapar Participações S.A.

Ultragaz was Brazil’s first distributor of LPG and serves about 11 million homes in the bottled gas segment and 50,000 customers in the bulk segment.

The total value of the sale corresponds to an enterprise value of $830 million (R$ 2.8 billion).

The amount to be paid will be restated by the Interbank Deposit Certificate between the dates of signing and closing of the transaction.

The value of the deal “will still be subject to adjustments resulting from the variations of working capital and the position of the net debt of Liquigás between December 31, 2015 and the date of closing of the deal,” Petrobras said.

The sale is part of Petrobras’ 2015 to 2016 divestment plan.

Petrobras confirmed in October 2015 that it planned to sell up to $15.1 billion worth of assets by the end of 2016.

Petrobras said on Thursday that the Liquigás sale is “aligned with the company’s strategic plan, which aims to optimize the business portfolio, with focus on oil and gas, withdrawing entirely from LPG distribution.”

This transaction is still subject to the shareholder approval at both Petrobras and Ultrapar along with the completion of customary closing conditions.

A closing date for the deal has not yet been disclosed.


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