The Australian Competition and Consumer Commission (ACCC) on Tuesday approved Origin Energy’s $18.7 billion takeover by Canada’s Brookfield and its US-based partner, EIG, opening a debate about shareholder value in the megadeal.
The ACCC announcement clears another hurdle in the giant Toronto-based asset manager’s plan to invest $20 billion in clean energy and storage in Australia, which it argues will help the energy transition.The ACCC said it can only clear a deal if it is satisfied the proposed acquisition would not likely substantially lessen competition, or that the likely public benefits would outweigh the detriments.
“On the first limb of the test, we are not satisfied that the proposed acquisition would not be likely to substantially lessen competition,” ACCC chairwoman Gina Cass-Gottlieb said. “However, after a detailed review, we are satisfied that the proposed acquisition is likely to result in public benefits that would outweigh the likely public detriments.
Brookfield has argued the deal would enable an acceleration of Australia’s faltering energy transition in the National Electricity Market, opening up a pathway for $20 billion of investment it wants to make in clean energy and storage here. The deal was conditional on approval from the ACCC and the Foreign Investment Review Board, as well as from Origin Energy shareholders when it goes to a vote.that the offer price, which was worth about $8.91 a share when agreed upon in March, undervalues Origin given its improved performance and the brighter market outlook, as well as the growth in its part-owned UK affiliate, Octopus Energy.
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