Sempra Energy announced that it has entered into a cooperation agreement with affiliates of Elliott Management Corporation (Elliott) and Bluescape Energy Partners LLC (Bluescape). Funds affiliated with Elliott and Bluescape collectively own a 4.9-percent economic interest in Sempra Energy valued at $1.6 billion.

Board Enhancement

As part of the agreement and the ongoing refreshment of the Sempra Energy board, the parties have worked cooperatively together to identify a discrete list of final board nominees and expect to work together for Sempra Energy to announce and appoint two new directors to Sempra Energy's board that are mutually agreed between the parties in the coming weeks.

LNG and Business Development Committee

Additionally, Sempra Energy will repurpose its board's current LNG Construction and Technology Committee into a new LNG and Business Development Committee. The new committee will consist of its three current members and, upon appointment to the Sempra Energy board, the two new directors.

The LNG and Business Development Committee's updated charter calls for it to work with management and the board in leading a comprehensive review of Sempra Energy's businesses. The charter also allows the committee to retain its own independent consultants and advisors. Sempra Energy intends to update the market on the results to date of the strategic review, including any actions to be taken, in the first quarter of 2019.

Elliott and Bluescape also have agreed to customary standstill, voting and other provisions.

"Sempra Energy is committed to an open dialogue with our shareholders and to considering all investor perspectives on the company's existing strategy and longer-term opportunities to create shareholder value," said Jeffrey W. Martin, CEO of Sempra Energy. "We are pleased to have reached a positive outcome with Elliott and Bluescape. Our management team looks forward to working with the LNG and Business Development Committee and our full board on the continued thoughtful examination of our business and capital allocation opportunities."

Jesse Cohn and Jeff Rosenbaum of Elliott issued the following statement: "This announcement is the result of a constructive dialogue with Jeff Martin, Sempra Energy's senior management team and board, and we look forward to continuing the collaborative relationship. Our interactions with the Sempra Energy team have given us confidence in their direction and ability to execute. We are confident that Jeff and his team, along with the directors who will be added to the board and the LNG and Business Development Committee's review, will lead a new era of sustainable value creation for all of Sempra Energy's stakeholders."

"Today's agreement will help create long-term value for all Sempra Energy shareholders," said John Wilder, chairman of Bluescape. "This outcome is a credit to the Sempra Energy board, and we believe the board and management are well-positioned to lead the company on this path forward."

The full cooperation agreement between Sempra Energy and Elliott and Bluescape will be filed on a Form 8-K with the Securities and Exchange Commission.

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Sempra Energy   Sempra   M&A  

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