Wednesday, October 13, 2010

Korean Fund, KKR complete buy of Chevron stake in Colonial

ALPHARETTA, Ga. - National Pension Service, South Korea's biggest state fund, has bought Chevron Corp.’s stake in Colonial Pipeline Co. in partnership with Kohlberg Kravis Roberts & Co. (KKR & Co. LP) to diversify its investment portfolio.

The South Korean fund has purchased a 23.44 percent stake in the operator of the largest refined petroleum products pipeline linking U.S. Gulf Coast refiners and East Coast markets, National Pension said in an e- mailed statement on Oct. 12, without disclosing the transaction value.

The purchase makes the consortium the second biggest shareholder in Colonial only after U.S.-based Koch Industries Inc.

"The investment is part of our efforts to diversify globally to ensure stable long-term returns, and it would be an important opportunity to expand investments in energy-related assets," according to the statement.

National Pension was picked as a preferred bidder to acquire the stake for about $890 million, the Korea Economic Daily said on Aug. 23, citing an unidentified official at the fund.

The fund supplied most of the capital for the purchase, said two people familiar with the deal.

KKR will manage the asset on behalf of the South Korean fund, the people said.

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