SNC-Lavalin Group Inc. is selling its Alberta electricity transmission company AltaLink for $3.2-billion, as it moves away from infrastructure investments and puts its resources into engineering and construction.
The company said Thursday that it is selling AltaLink, Alberta’s largest power transmission company with 12,000 kilometres of transmission lines, to Berkshire Hathaway Energy, which has $70-billion (U.S.) worth of power distribution assets. Based in Des Moines, it is majority owned by star investor Warren Buffett’s Berkshire Hathaway Inc.
Early last year, SNC announced a strategic plan to cash out of its mature infrastructure-concession investments, and last fall it indicated that AltaLink could be sold, in whole or in part.
Montreal-based SNC said Thursday that selling AltaLink is “another significant step” in the execution of its strategic plan to “unlock and create value” that will support its engineering and construction business. It will focus on resource, infrastructure and power businesses in North America, South America and the Middle East.
SNC CEO Robert Card said in an interview that SNC had “a large quantity of very well-heeled people” interested in buying AaltaLink, and the bidding process was “highly competitive.”
The capital generated from the sale will be used to beef up SNC’s engineering and construction business so it is a strong “national champion in Canada and Quebec,” Mr. Card said. “This is jet fuel for that process.”
SNC has “a couple of dozen” other infrastructure assets that will eventually be sold, he said. The biggest of those is the 407 toll highway in Ontario.
SNC will continue to work with Berkshire Hathaway Energy’s subsidiary, MidAmerican Transmission, on transmission projects. SNC will provide engineering and construction management expertise on new projects in Canada and the U.S.
Mr. Card, the first American-born CEO in SNC’s 102-year history, joined the company in the fall of 2012. He has been shaking up SNC after a series of bribery, corruption and ethics scandals involving former top executives rocked the company.