Deals

AIG Highstar exits InterGen in $1bn deal

Indian development firm GMR Infrastructure will purchase AIG’s 50 percent stake in power generation company InterGen, while Ontario Teachers’ will continue to hold the remainder of the company it purchased with AIG in 2005.

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AIG’s private equity infrastructure arm, AIG Highstar, has agreed to sell its 50 percent stake in power generation company InterGen for $1.1 billion (€703 million) to Indian infrastructure developer GMR Infrastructure. The deal is the largest acquisition of an energy utility company by an Indian firm, according to GMR.

InterGen, which operates power plants in five countries, including the UK, the Netherlands, Mexico, Australia and the Philippines, was bought by Ontario Teachers’ Pension Plan and AIG Highstar in 2005 for a combined total of C$2.1 billion (equivalent at the time to $1.75 billion). Ontario Teachers’ continues to hold its stake in the company.

GMR, which expects to close the deal in the third quarter of this year, said the acquisition would allow it to expand into InterGen’s core geographies.

InterGen, based in the Netherlands, generates a total gross capacity of more than 12,000 megawatts, one-third of which is under development.

AIG Highstar’s investment in InterGen was led by partners John Stokes and Michael Miller. An AIG spokeswoman declined to comment beyond a publicly issued statement.

AIG Highstar Capital II closed on $800 million in 2005. Its predecessor closed on $406 million in 2000. The firm closed its third infrastructure fund, AIG Highstar Capital III, last year on $3.5 billion, including $800 million for co-investments. The fund was twice the size of its initial target.

AIG Highstar has also invested in Ports America Group, formerly known as MTC Holdings, the largest US terminal operator, and Interstate Waste Services, a waste collection and transportation company operating in New Jersey and New York.