The Peter Costello-chaired Future Fund has combined with the country’s biggest carbon emitter in AGL Ltd and the Queensland government’s investment arm, QIC, to bid an agreed $NZ2.94 billion ($A2.73 billion) for New Zealand-based energy group, Tilt Renewables Ltd.
Powering Australian Renewables (PowAR) – owned by AGL, the Future Fund and Queensland Investment Corporation– will acquire Tilt’s Australian business. New Zealand’s Mercury Energy will buy its wind farms across the Tasman.
Shares in Tilt Renewables soared following news of the deal and were up 15% to an all-time high of $7.04.
Tilt Renewables has 20 wind and solar farms operational or under development across New Zealand, Victoria, New South Wales and South Australia.
AGL chief executive Brett Redman said the acquisition built on the company’s legacy as one of the largest private investors in renewable energy and “further progresses” AGL’s transition away from fossil fuel-fired power generation and towards cleaner alternatives.
“The proposed acquisition by PowAR will provide more renewable energy options in AGL’s generation portfolio, further supporting our orderly transition away from coal-fired power and responding to our customers’ increasing appetite for cleaner energy,” Mr Redman said.
Infratil -Tilt’s major shareholder- knocked back a $5.1 billion bid in December from Australian Super, Australia’s biggest superannuation investors, and of course a major industry fund (controlled by business and unions).
Infratil Ltd, Tilt’s largest shareholder, and Mercury NZ have agreed to vote in favour of the deal, the company said, adding that a meeting to vote on the agreement would likely be held in about four months.
In separate statements, Infratil said it expected to fetch about $NZ1.93 billion from the sale of its 65.5% stake in Tilt, while Mercury NZ said the deal would be immediately accretive and add $NZ50 million to its 2022 earnings.
