UGI Corp. to retain ownership of AmeriGas Propane

AmeriGas Propane will remain a UGI Corp. company for now.

UGI’s board of directors concluded a strategic review of its LPG businesses, primarily focused on AmeriGas. After extensive deliberation, UGI says, the board determined that retaining ownership of AmeriGas is the best option to maximize shareholder value.

UGI announced last August that it had initiated the review process. The company said it was exploring a full range of options with the goal of reducing UGI’s earnings volatility and strengthening its balance sheet. It was also looking to optimize its cost structure and realign its capital allocation priorities.

During the review, according to UGI, the company and its financial advisers evaluated several value-creation opportunities, including a potential sale, spin and joint venture of AmeriGas. While the company conducted due diligence with multiple strategic and financial parties, the board decided that the company should focus on a restructuring and operational improvement plan for AmeriGas. The review concluded that a disciplined execution of a revised operational strategy and optimization of UGI’s assets best positions the company to create long-term shareholder value.

“After a comprehensive review process, the board agreed that in the current market, the best path forward in creating shareholder value is to execute on its repositioned long-term strategy and strengthen the balance sheet,” says Mario Longhi, interim president and CEO for UGI. “This includes maintaining an intense focus on customer retention, improved free cash flow generation, effective cost control and disciplined capital allocation. Although the process has concluded, we remain open to all opportunities to optimize our portfolio and unlock further value for shareholders.”

UGI Corp. is a distributor and marketer of energy products and services in the U.S. and Europe. It offers energy solutions to customers through its subsidiaries, which provide natural gas transmission and distribution, electric generation and distribution, midstream services, propane distribution, renewable natural gas generation, distribution and marketing, and energy marketing services.

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