KKR makes $9B takeover bid for UGI Corp: WSJ

KKKR & Co. and Energy Capital Partners have submitted a revised bid to acquire DCC, a European fuels supplier, at £66.72 per share, valuing the company at approximately $7.6 billion. The increased offer comes after initial proposals were rejected by DCC’s board in April 2023. Directors of DCC have since indicated they are “minded to recommend” the offer to shareholders, signaling a potential shift in the company’s stance.

While the proposed DCC acquisition is not directly related to UGI Corporation, the energy sector remains a focal point for private equity firms like KKR. UGI, a U.S.-based energy distributor and marketer, has also been navigating a dynamic market. In its fiscal 2023 report, UGI posted a GAAP net loss of $1.5 billion but reported adjusted net income of $613 million. The company attributed the adjusted earnings to strong performance in its Utilities and Midstream & Marketing segments, as well as strategic divestitures in the UK, Belgium, and France.

UGI has also committed to renewable energy initiatives, investing over $500 million in RNG projects and completing two major projects in upstate New York. The company continues to prioritize dividend payments, having paid dividends for 139 consecutive years, and has issued fiscal 2024 guidance for adjusted diluted EPS between $2.70 and $3.00.

Meanwhile, UGI Corporation is also in exclusive negotiations to acquire Totalgaz, a French LPG distributor owned by TotalEnergies. The deal, if finalized, would expand UGI’s European presence and strengthen its LPG distribution network in France.

As private equity firms and energy companies continue to reshape their portfolios, UGI and DCC represent two distinct but interconnected stories in the evolving energy landscape.