Australian energy company Origin Energy has entered into a scheme implementation deed (SID) to be acquired by a consortium featuring Brookfield Renewable Partners and others in a deal worth A$18.7bn ($12.5bn).
Brookfield Renewable Partners along with its institutional partners and institutional investors GIC and Temasek (together called Brookfield) and EIG-backed MidOcean Energy are part of the consortium.
As per the terms of the deal, shareholders of the publicly-listed Origin Energy will be paid A$8.91 ($5.97) per share, which is a premium of 53.4% to the firm’s unaffected share price. In February 2023, the company was offered a bid of A$8.9 per share, and prior to that a bid of A$9 in November 2022.
Origin Energy’s board has unanimously backed the latest bid and has asked the company’s shareholders to vote in favour of the deal should there be no superior proposal. The recommendation is also conditional on an independent expert ruling that the SID is in the best interests of the company’s shareholders.
Origin Energy CEO Frank Calabria said: “The significant premium placed on Origin by the Consortium reflects the value of our strategy and our advantaged position to capture value from the energy transition. We believe this transaction is a great outcome not only for our shareholders, but for all stakeholders including our customers, employees and partners.”
Origin Energy is an electricity and gas retailer with 4.5 million customer accounts as per the company’s 2022 annual report. The company has a generation portfolio of 7.3GW along with a 27.5% stake in the Australia Pacific LNG project.
After the closing of the deal, Brookfield will assume ownership of the Australian firm’s energy markets business. MidOcean Energy will be owing Origin Energy’s integrated gas segment, which includes its upstream gas stakes as well as the stake in the Australia Pacific LNG project.
Brookfield said that it is also working with India-based Reliance Industries as a strategic partner for exploring areas of collaboration in renewable energy in the context of the deal.
Brookfield Asia Pacific CEO Stewart Upson said: “The acquisition of Origin Energy presents Brookfield with a unique opportunity to invest at least A$20 billion and make a material difference to achieving Australia’s net zero targets.
“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.”
The SID is conditional upon the satisfaction of certain conditions such as Origin Energy’s shareholders’ approval, court and regulatory approvals, and others. The Australian energy company and its acquiring consortium are targeting implementation of the scheme by early 2024.
