Origin Energy has agreed to a A$15.35bil (US$10.21bil or RM45.15bil) takeover offer from a consortium led by Canada’s Brookfield, nearing the conclusion of one of the country’s biggest private equity-backed buyouts. — Bloomberg
SYDNEY: Brookfield Asset Management will spend about US$13.3bil (RM58.8bil) over the next decade to replace Origin Energy’s Australian power generation infrastructure with new-build renewables and storage facilities, a senior executive says.
On Monday, Origin Energy agreed to a A$15.35bil (US$10.21bil or RM45.15bil) takeover offer from a consortium led by Canada’s Brookfield, nearing the conclusion of one of the country’s biggest private equity-backed buyouts.
Australia’s No. 2 power producer has been looking to speed up its transition to cleaner energy by accelerating the planned shutdown of the country’s biggest coal-fired power plant and selling its gas exploration assets.
“Our plan is to invest a further A$20bil (RM58.8bil) of capital to fully replace its power generation and its power purchases with green power that meets all of its customers’ requirements, and we propose to do that over a 10-year period well in advance of the 2050 goal,” Brookfield Asia Pacific chief executive officer Stewart Upson told Reuters in an interview, referring to a target for net-zero direct and indirect emissions by 2050.
The Canadian firm enlisted Singaporean funds GIC and Temasek as co-investors in its bid, while MidOcean Energy will gain control of Origin’s 27.5% stake in Australia Pacific Liquefied Natural Gas.
Upson said Brookfield has about US$60bil (RM265bil) invested in Australia, but the Origin deal would represent a “step change”.
Argo Investments’ senior investment officer, Andy Forster, said his firm, the ninth-biggest investor in Origin, was positive about the deal, even though it might take time to gain regulatory approvals from the Foreign Investment Review Board and the competition regulator.
“Brookfield seems very committed to making the deal happen,” he added.
Shares were trading 1% higher at A$8.255 (RM24.25) yesterday, below the implied cash-and-scrip offer price of A$8.91 (RM26.20) a share, as the deal is not expected to be finalised until early 2024.
The Brookfield-led consortium trimmed its offer for Origin by 1% last month after a government move to cap gas prices hit valuations in the sector.
“We had to take our time to assess all the different developments and make sure that we were comfortable that they didn’t have an impact,” Upson said.
The banking industry’s volatility also slowed the deal, but the financing was fully committed and was not affected, he added. — Reuters
