Centrica to pay $1.03bn for US unit

Hess Corp said it would sell its Energy Marketing unit to Centrica for about $1.03bn as part of its plan to focus on exploration and production.

Centrica’s North American subsidiary, Direct Energy Business, will buy the business, which supplies natural gas and electricity, for $731m in cash plus about $300m in working capital. Hess announced plans to sell or exit its retail gasoline and trading businesses, as also its marketing business, after activist investor Elliott Management began a campaign in January to break up the company.

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The sale of the marketing business, along with sales of four producing assets earlier, brings total sales this year to $4.5bn, Hess said.

The sale of the marketing business, expected to close in the fourth quarter, will help to begin buying back shares under its existing $4bn repurchase plan, the company said.

The energy marketing business serves 23,000 commercial, industrial and small business customers in 18 states in eastern US and will help Centrica expand its presence in North America.