APA Group Nets $64M from Divesting Allgas Gas Distribution Stake
APA Group has agreed to sell its 20% stake in the Allgas gas distribution network to Stonepeak affiliates, marking another step in its strategy to simplify operations and focus on core growth areas.
- APA divests 20% stake in Allgas Network to Stonepeak affiliates
- Transaction part of Stonepeak’s full acquisition of GDI (EII) Pty Ltd
- Sale proceeds estimated at $64 million, less than 1% of APA’s FY25 underlying EBITDA
- APA to provide corporate services to Allgas for up to three years post-sale
- Completion expected by end of Q1 2026, subject to conditions
Strategic Divestment
APA Group (ASX, APA) has taken another decisive step in refining its business focus by agreeing to divest its 20% equity stake in GDI (EII) Pty Ltd, the owner of the Allgas gas distribution network. The buyer, affiliates of Stonepeak (Australia) Pty Ltd, will acquire the entire GDI entity, signaling a full transfer of ownership. This move aligns with APA’s ongoing strategy to simplify its portfolio and concentrate on core growth opportunities in the energy infrastructure sector.
Financial Impact and Operational Continuity
The divestment is financially modest for APA, with the stake representing less than 1% of the company’s underlying EBITDA for the fiscal year 2025. The estimated proceeds from the sale are approximately $64 million, though these are subject to adjustments based on completion timing and other factors. Importantly, APA will continue to provide corporate services to GDI and the Allgas Network for up to three years, ensuring operational continuity during the transition period.
Context Within APA’s Broader Strategy
CEO and Managing Director Adam Watson emphasized that this transaction is part of a broader effort to streamline APA’s business. Following the recent divestment of its Networks business, APA is moving away from non-core gas distribution assets in Australia. This strategic pruning is designed to reduce costs and sharpen the company’s focus on significant growth prospects, particularly in areas where APA holds dominant infrastructure assets.
Market and Regional Significance
The Allgas Network serves key regions in South East Queensland and Northern New South Wales, areas critical to Australia’s gas distribution landscape. Stonepeak’s acquisition of the entire GDI entity suggests confidence in the long-term value of these assets. For APA, the divestment frees up capital and management bandwidth to pursue its broader energy infrastructure ambitions, including investments in electricity transmission and renewable energy assets.
Looking Ahead
The transaction is expected to finalize by the end of the first quarter of 2026, pending customary conditions. Investors will be watching closely to see how APA redeploys the proceeds and whether further portfolio adjustments are forthcoming as the company sharpens its strategic focus.
Bottom Line?
APA’s sale of its Allgas stake marks a clear pivot towards a leaner, growth-focused energy infrastructure portfolio.
Questions in the middle?
- How will APA reinvest the $64 million proceeds from the sale?
- What operational changes will occur during APA’s three-year corporate services period?
- What are Stonepeak’s strategic plans for the Allgas Network post-acquisition?
