Antofagasta to sell water business to Colombia's EPM for $965 million
SANTIAGO (Reuters) - Chilean miner Antofagasta Plc said it had agreed to sell its water utility business Aguas de Antofagasta (Adasa) for $965 million (642.86 million pounds) to Colombia's Empresas Publicas de Medellin[EMPPM.UL], boosting the London-listed firm's share price.
Adasa supplies drinking water and water treatment services to 162,000 clients in northern Chile, including the mining-centred towns of Antofagasta and Calama, the company said in a statement on Thursday.
"This will allow us to focus our efforts and investments on new mining projects, especially in the Antofagasta region," said Chief Executive Officer Diego Hernandez.
Antofagasta's shares were up 4.7 percent at 1459 GMT, outpacing peers such as Rio Tinto Plc and BHP Billiton Plc .
The sale of the water utility business "took the market by surprise" but the valuation looks reasonable, said a London-based analyst, who asked not to be named because he was not authorized to speak publicly.
"There's a track record of returning cash to shareholders ... or the money could be used for organic growth or to look at M&A opportunities, when (copper) prices are more depressed," said the analyst.
Colombia's EPM is a utilities firm with businesses throughout Central America and South America.
(Reporting by Rosalba O'Brien and Anthony Esposito; Editing by Chizu Nomiyama and Lisa Shumaker)
