NZ's Meridian Energy sells Australia unit for $528mil to Shell-consortium

Under the deal, the energy giant's unit Shell Energy Operations will get the control of Meridian's online energy retailer Powershop Australia, while ICG will become the owner of the electricity generator's hydro power and wind farm infrastructure assets in Australia.

Meridian Energy on Monday said it agreed to sell its Australian energy business for A$729 million ($527.80 million) to a consortium of global energy giant Royal Dutch Shell and Australian investment manager Infrastructure Capital Group (ICG).

The agreement comes months after the Wellington, New Zealand-based power company kicked off a review of Meridian Energy Australia, which has about 294 megawatts of renewable generation capacity along with a retail power and gas business.

"With emissions the problem, and renewable energy the solution, the buyers are readying to invest heavily in a cleaner future," Meridian Chief Executive Neal Barclay said in a statement https://www.nzx.com/announcements/383219.

Under the deal, the energy giant's unit Shell Energy Operations will get the control of Meridian's online energy retailer Powershop Australia, while ICG will become the owner of the electricity generator's hydro power and wind farm infrastructure assets in Australia.

Shell, which aims to drop https://www.reuters.com/world/uk/shell-proposes-single-share-structure-tax-residence-uk-2021-11-15/#:~:text=LONDON%2C%20Nov%2015%20(Reuters),shifts%20from%20oil%20and%20gas "Royal Dutch" from its name and scrap its dual share structure to move its head office to Britain, said the deal will extend its position as Australia's largest dedicated electricity retailer to commercial and industrial clients.

"Our aim is to become a leading provider of clean power-as-a-service and this acquisition broadens our customer portfolio in Australia to include households," Shell's Executive Vice President of Renewables and Energy Solutions Elisabeth Brinton said separately.

Meridian in its statement added that it will continue to consider capital structure, dividend policy and future opportunities for re-investment of the proceeds as settlement of the transaction approaches.

The deal is expected to be completed by the first quarter next year, and is subject to conditions including Shell getting foreign investment approval from the Australian Government.

ICG did not immediately respond to a Reuters request for comment. ($1 = 1.3812 Australian dollars)- Reuters