A consortium comprising Canadian asset giant Brookfield and US-based investment firm EIG has inked an $18.7 billion deal to acquire Australia’s largest integrated power generator and energy retailer, Origin Energy.
The Origin board unanimously recommended shareholders vote in favour of the scheme. Upon closing of the transaction, Brookfield, its institutional partners and investors will own Origin’s energy markets business. MidOcean will separately own Origin’s Integrated Gas segment including its upstream gas interests and the 27.5% stake in Australia Pacific LNG (APLNG).
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MidOcean has entered into an agreement to on-sell a 2.49% interest in APLNG to ConocoPhillips. ConocoPhillips, already a 47.5% owner in APLNG, is the current downstream operator and intends to take over upstream operatorship of APLNG.
In addition to its institutional and investor partners, Brookfield is also working with Reliance Industries as a strategic partner to assess areas of collaboration in renewable energy in the context of the transaction.
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 business plan for Origin Energy Markets contemplates at least $20 billion of additional investment during the next decade to construct up to 14GW of new renewable generation and storage facilities in Australia. This is expected to enable the retirement of Eraring coal-fired power station, and will be undertaken with the highest regard for network reliability and security.
Brookfield Asset Management chair and head of transition investing Mark Carney said, “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.”
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EIG CEO Blair Thomas said, “LNG will be critical in delivering energy transition targets, and this transaction is a compelling opportunity to accelerate EIG’s strategy of gaining exposure to high quality LNG assets around the globe. We have long been attracted to the Australian market, with an established presence in Australia since 2000, and look forward to playing a pivotal role in meeting Australia’s transition targets by enabling broader decarbonisation efforts at APLNG.”