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THE NEW YORK TIMES: Royal Dutch Shell to Sell InterGen Unit: “The energy giant is still trying to focus its operations after the turmoil caused by an energy-reserve accounting scandal last year.” ( Posted 20 April 05




NEW YORK (AP) -- In a big boost to its asset-shedding drive, Royal Dutch/Shell Group of Cos. Tuesday said it agreed to sell its InterGen N.V. power-plant business to a duo comprised of the private-equity arms of American International Group Inc. and the Ontario Teachers' Pension Plan for $1.75 billion.


The sale of Burlington, Mass.-based InterGen, which is 68 percent owned by Shell and the remainder by a unit of Bechtel Group Inc., includes 10 power plants in the United Kingdom, the Netherlands, Mexico, the Philippines, China, and Australia.


Shell and its partner Bechtel, of San Francisco, are keeping other plants in the United States, Colombia, and Turkey, the companies said.


Shell, along with many of its Big Oil peers, have been dumping noncore assets to focus on developing new oil reserves and returning cash to investors.


The energy giant is still trying to focus its operations after the turmoil caused by an energy-reserve accounting scandal last year. In September, it promised investors it would shed as much as $12 billion in businesses through next year. Among other units, Shell is selling its British liquefied petroleum-gas unit and a chemicals joint venture, Basell, owned with BASF AG.


The Toronto-based Ontario Teachers fund last year took part in a group that bought some of National Grid Transco PLC's British gas distribution networks. With net assets of more than $64 billion, the Ontario Teachers' Pension Plan manages the retirement income of 154,000 teachers, 93,000 retired teachers, and 91,000 former teachers.


The deal reflects how private-equity firms have emerged as well-funded market players eager to put their money to work acquiring even utilities, once considered the epitome of highly regulated, staid businesses which financial buyers would avoid.


In recent weeks, investment funds have snapped up Toys R Us Inc. for about $6.6 billion and SunGard Data Systems Inc. for $11.3 billion.


Buyout funds are often able to outbid companies that have a more strategic rationale for making the purchase because they are willing to borrow heavily to finance the deal.


New York-based American International is an insurer with assets of $776.42 billion as of Sept. 30.


U.S. shares of Royal Dutch Shell rose 90 cents, or 1.7 percent, to close at $54.69 on the New York Stock Exchange


Shares of AIG rose 32 cents, or 0.6 percent, to $51.58.


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