Brookfield consortium seeks permission to acquire Origin

Origin Energy logo on side of corporate headquarters (profit)
Image: Shutterstock

A consortium comprising investment giant Brookfield and global institutional investors GIC and Temasek, and MidOcean Energy has applied for merger authorisation from the ACCC in relation to its proposed acquisition of Origin Energy

If the ACCC provides authorisation and other conditions precedent are met, the Brookfield-led consortium will own Origin’s Energy Markets business, a power generator and energy retailer, while MidOcean will separately own Origin’s integrated gas business including its stake in Australia Pacific LNG (APLNG). 

Related article: Brookfield and EIG buy Origin Energy for $18.7 billion

The consortium expects the ACCC will advise its decision after 90 days following a process of seeking industry and other stakeholder feedback on the Proposed Transaction. 

Brookfield Asia Pacific CEO Stewart Upson said, “The need to decarbonise the world’s energy systems in order to minimise the impact of climate change and limit the global temperature increase is both urgent and daunting. The amount of private sector investment required for the energy transition over a short timeframe is unprecedented. 

“The proposed transaction to acquire Origin Energy will not be detrimental to competition in any market given the intensely regulated nature of the electricity generation sector, reinforced by the fact that AusNet and Origin will remain separate stand-alone companies with separate investor groups. 

“Moreover, the transaction will provide substantial public benefits because we intend to invest between A$20 billion and A$30 billion in rapidly expanding and accelerating the renewables build out at Origin Energy Markets. This will deliver both environmental benefits by helping Australia meet its net zero targets, and consumer benefits by putting downward pressure on electricity prices and reducing the risk of market dislocation events over time. It will also provide a range of public benefits including assisting Australia to meet its international commitments to address climate change.” 

EIG CEO Blair Thomas said: “Energy transition will require a “whole of society” approach to be effective. Government has an important role to play in enabling private sector capital and solutions and we believe this transaction is an important step in the right direction.” 

In its application, the consortium states the proposed transaction will not result in a substantial lessening of competition in any relevant market. It expects the ACCC will focus its attention on the investments in AusNet and Intellihub by another Brookfield business group. 

AusNet is heavily regulated in relation to both transmission and distribution. Brookfield believes this degree of regulation combined with the operating dynamics inherent in the Victorian energy environment means AusNet has neither the ability nor the incentive to discriminate in favour of Origin Energy markets. 

Related article: Origin to develop $600 million large-scale Eraring battery

Intellihub, which is owned in a 50:50 joint venture with a third party, operates in a competitive market and those market dynamics prevent any form of anti-competitive behaviour. 

Origin, AusNet and Intellihub will remain separate companies, with separate investor groups. Different Brookfield funds hold majority stakes and the unaffiliated co-investors in each business are different. 

Previous articleEndua unveils first standalone hydrogen power bank
Next articleHESTA to co-invest in ReNu’s green hydrogen projects