Centrica Buys Hess’s Energy Marketing Business for $731 Million

Centrica Plc (CNA) agreed to buy Hess Corp. (HES)’s Energy Marketing business for $731 million in cash as part of a plan to double profitability in North America within five years.

The transaction by Direct Energy Business, Centrica’s North American subsidiary, also includes net working capital of about $300 million, the Windsor, England-based company said today in a statement.

The company said in February its North American expansion drive would be achieved through small and large purchases. It teamed up with Qatar Petroleum to buy gas fields from Canada’s Suncor Energy Inc. in April and also signed a 20-year contract with Cheniere Energy Inc. to import the fuel from the U.S.

The deal “marks a significant step towards delivering on our strategy - substantially increasing the scale of our North American downstream business and integrating along the gas value chain,” Sam Laidlaw, Centrica’s chief executive officer, said in the statement.

Hess’s Energy Marketing business supplied 378 billion cubic feet of gas and 28 terawatt hours of electricity to more than 23,000 customers last year, according to the statement. The acquisition will make Direct Energy the largest business gas supplier on the east coast.

Centrica is scheduled to publish first-half results tomorrow.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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