Brazil: Petrobras pulls back sale of gas unit citing competition concerns

Petroleo Brasileiro SA has announced that it will abandon plans to sell its liquid propane (LP) gas unit through an initial public offering (IPO), opting to reopen a traditional sales process.

The parastatal company has not set a date for interested companies to present their proposals, as they continue to discuss the best way to avoid any conflict with the country’s competition authorities.

Petrobras has been searching for international buyers for its LP gas unit, Liquigas. The company is mainly engaged in the sale of gas canisters, primarily used by Brazilian households that are not connected to the fixed distribution network. The segment could prove to be unknown to investors in more developed markets.

Petrobras has also explored ways to structure the sale without provoking the wrath competition regulators. A previous agreement, in which Petrobras would have sold its subsidiary to the investment fund Ultrapar Participações in 2016, was blocked by competition regulator CADE. Ultrapar controls the largest distributor of LP gas in Brazil, Ultragaz. Some of Ultragaz’s rivals on that bid may still be interested in a new sale.

Full Content: Reuters

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