JERA Americas’ acquisition of a 25.7% interest in Freeport LNG Development from Global Infrastructure Partners wins the Americas Oil & Gas Acquisition of the Year in the IJInvestor Awards 2022.

The $2.5 billion deal closed on 14 November 2021 and saw the Global Infrastructure Partners II divest the stake in Freeport LNG – which owns and operates an LNG export facility on Quintana Island, near Freeport, Texas – to JERA Americas.

Freeport in May 2020 completed construction on the third of its 3 liquefaction trains which together produce more than 15 mtpa and are underpinned by long-term contracts with top-tier offtakers.

It is the seventh largest LNG facility in the world, the second largest in the US, and the only US facility to use electric motor-driven technology, emitting 90% less CO2 than a comparable gas turbine-driven facility.

Freeport is in the process of pursuing multiple accretive growth opportunities across the LNG value chain, including associated energy transition projects which better align FLNG with environmental sustainability.

The deep financing and advisory relationship offered by Mizuho Securities and Rothschild & Co with both FLNG and JERA was instrumental in executing on the transaction and helped to bridge the valuation gap to demonstrate all value aspects in the company.

The judges celebrated it as a “good partnership” in what was termed a “one-horse race”, but also admitting: “It has some greener potential with energy efficiency built in.”

One judge added: “There are critical parts of the infrastructure with potential for future uses in different areas.”

Deal structuring required detailed coordination between financing and M&A deal teams, aligning best interests of bidders and meeting expectations of the selling entity.

Mizuho was able to provide a unique financing solution which was able to fund prior to process closing and transfer to the potential acquirer with minimal incremental costs.

This funding solution was a first of its kind application in the LNG space and led to improved returns for the seller and financing surety to the buyers above and beyond what a traditional staple financing package is capable of.

Prior to the completion of the sale of GIP’s stake, Mizuho underwrote and funded an $800 million financing package to GIP. This financing was portable to any buyer that acquired GIP’s stake in Freeport LNG.

As part of the M&A process, this financing served as a benchmark for potential investors, gave a sense of comfort to potential investors to know there is a funded financing package that solves one of the key obstacles in M&A processes, and gave GIP funding prior to the completion of any deal.