Sempra Energy to partner RBS

Sempra Energy is to form a joint venture with the Royal Bank of Scotland (RBS) to expand Sempra Energy's commodity-marketing business.

The joint venture, called RBS Sempra Commodities, will absorb the operations of Sempra Commodities. RBS will provide the joint venture with all growth capital, working-capital requirements and credit support. As a result of this transaction, Sempra Energy estimates it will free up more than $1 billion previously dedicated to the company's commodities business. Sempra Energy will keep $1.3 billion invested in the joint venture.

"Over the past nine years, we have grown Sempra Commodities to become one of the most successful companies in its sector," said Donald Felsinger, chairman and chief executive officer of Sempra Energy. "Establishing RBS Sempra Commodities will allow for faster international expansion of our commodities business into new markets, benefiting from RBS' strong presence in North America, Europe and Asia, and access to greater capital resources."

The transaction, which is expected to be completed in the fourth quarter of 2007, is subject to customary closing conditions and regulatory approvals, including from the UK's Financial Services Authority, the US Federal Reserve Board and US Federal Energy Regulatory Commission.