Brookfield and EIG Consortium have signed a binding agreement to acquire Origin Energy at the end of March.
A consortium comprised of Brookfield Renewable Partners, together with its institutional partners and global institutional investors GIC, and Brookfield, and MidOcean Energy, has entered into a scheme implementation deed with Origin Energy.
Origin is Australia’s largest integrated power generator and energy retailer with a 24 per cent market share of the national electricity market and owner of a 27.5 per cent stake in Australia Pacific LNG Project.
“As the energy transition gathers pace, what’s needed is increasingly clear: faster deployment of large-scale renewables, the accelerated, responsible retirement of coal generation, and an interim, supportive role for gas as the dependable back-up fuel. Brookfield is determined that the new Origin Energy Markets will lead the way in all respects at this critical moment for the Australian economy,” said chair and Brookfield asset management and head of transition investing Mark Carney.
Brookfield, its institutional partners and investors GIC and Temasek will acquire Origin’s Energy Markets business, with Brookfield intending to significantly reduce Origin’s carbon emissions and invest at least $20 billion in new build renewables and storage.
The scheme values Origin at an enterprise value of $18.7 billion1. The purchase price of $8.91 per share represents a 53.4 per cent premium to the company’s unaffected share price.
This landmark transaction aims to accelerate decarbonisation of the energy grid and help Australia progress towards its net zero goals.
“The acquisition of Origin Energy presents Brookfield with a unique opportunity to invest at least $20 billion and make a material difference to achieving Australia’s net zero targets,” said Brookfield Asia Pacific chief executive officer Stewart Upson.
“We will build on the success of our global renewable power and transition business where we have a mandate to ‘go where the emissions are’ in putting billions of dollars behind an executable plan to reduce emissions at Origin.
“Brookfield has the capital, expertise, supply chain strength and global track record that’s needed to transform Origin’s generation fleet to greener sources and accelerate Australia’s energy transition while ensuring network security and reliability.”
Brookfield and EIG view Origin as critical to Australia’s energy transition and energy security. Both parties intend to use the acquisition to create separate platforms that will assist Australia’s transition to a net zero future.
Brookfield intends to accelerate the development of renewable generation capacity for Origin Energy Markets, which is expected to make a material difference to achieving Australia’s net zero targets at this crucial time in its energy transition.
The Origin board has stated that it is unanimously recommending that Origin shareholders vote in favour of the scheme in the absence of a superior proposal, and subject to an independent expert concluding the Scheme is in the best interests of shareholders.
Upon closing of the transaction, Brookfield, its institutional partners and investors will own Origin’s Energy Markets business, Australia’s largest integrated power generator and energy retailer.
“We’re thrilled to join forces with Brookfield and Origin in this transaction and to further expand our footprint in Australia,” said MidOcean Energy chief executive officer De la Rey Venter.
“Origin’s Integrated Gas business adds world-class assets to our portfolio – assets that fit our strategy to create a high quality, diversified, global ‘pure play’ integrated LNG company.
“We look forward to working with all stakeholders to help facilitate Australia’s energy transition, to bring stable and affordable gas supply to the domestic market and to provide a reliable supply of LNG to the region for decades to come.”
Source: Energy Today
