Morgan Stanley unit, pension fund to buy PSEG unit

Tue Jun 17, 2008 9:49am EDT
 
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NEW YORK (Reuters) - Morgan Stanley Infrastructure and the Ontario Teachers' Pension Plan have agreed to jointly buy SAESA Group, a Chilean subsidiary of power company Public Service Enterprise Group Inc PEG.N, for about $870 million.

MSI, part of Morgan Stanley Investment Management, and Teachers', a Canadian pension plan, will also assume $400 million in debt under the terms of the deal, the two companies said in a statement on Tuesday.

"Chile has established a sophisticated and stable regulatory framework that we find attractive," said MSI Chief Operating Officer Ron Lepin.

"SAESA ... generates predictable cash flows and steady returns over the long term, which is well suited to our investment objectives," Lepin added.

Stephen Dowd, Teachers' vice president of infrastructure, said: "SAESA Group is a well-run company with diversified electricity assets and a strong market position in Chile's regulated energy sector, making this an excellent investment for our portfolio."

SAESA is the second-largest electricity distributor in Chile in terms of geographical coverage. The unit also owns and operates electricity generating plants and transmission lines.

Morgan Stanley Investment Management managed $577 billion in assets as of February 29.

(Reporting by Jui Chakravorty; Editing by Lisa Von Ahn)