Origin Energy Limited today announced it has executed Sale and Purchase Agreements with the NSW Government to acquire the retail businesses of Integral Energy and Country Energy, and enter into GenTrader arrangements with Eraring Energy for a consideration of $3,250 million. In addition, under the GenTrader arrangements, there is a conditional amount of up to $198 million which will be payable. The Acquisition price will be $3,250 million, which is expected to be materially accretive to underlying EPS3 at completion, which will be funded by new debt facilities which are expected to be partly refinanced with a pro-rata equity offering to be conducted within 12 months.
Origin Chairman, Mr Kevin McCann said, “The acquisition is a transformational event in the growth of Origin. “The acquisition of Integral Energy and Country Energy’s retail businesses and the Eraring Energy GenTrader arrangements, secures a leading position for Origin in NSW, the nation’s largest energy market. It also enhances Origin’s position as the leading Australian integrated energy company. “Following completion of the transaction, Origin will be Australia’s largest energy retailer with 4.6 million customer accounts and will have one of the country’s largest and most diverse generation portfolios with more than 5,800 MW of capacity, through either owned generation or contracted rights.
The acquisition price of $2,300 million for the Integral Energy and Country Energy retail businesses includes the wholesale portfolio and NSW stamp duty. Movements in working capital until the completion date will be adjusted in accordance with the Sale and Purchase Agreements. The combined mass market retail business has been acquired for $1,282 per customer account. The cost of the combined wholesale portfolio is valued at $0.35 per Mwh. Following completion of the transaction, Origin’s total customer base will increase by more than 50 per cent, from 3 million customer accounts to 4.6 million. Origin’s share of electricity and natural gas mass market customer accounts in the National Electricity Market (NEM) region will increase from 20 per cent to 33 per cent. Combined, Integral Energy and Country Energy have more than 1.6 million electricity customer accounts, 33,000 natural gas customer accounts and 9,000 LPG customer accounts. Origin will acquire the retail businesses of both Integral Energy and Country Energy including customer and supplier contracts, working capital and intellectual property, including brands. The transaction does not include the acquisition of retail legal entities or employees.
Origin Energy is Australia’s leading integrated energy company focused on gas and oil exploration and production, power generation and energy retailing. It is a leading producer of gas in eastern Australia, is the largest owner and developer of gas-fired electricity generation in Australia and is a leading wholesaler and retailer of energy. The company services approximately 3 million electricity, natural gas and LPG customers across Australia. Origin’s strategic positioning and portfolio of assets provide flexibility, stability and significant opportunities for growth in the ever changing energy industry. Through Australia Pacific LNG, its 50:50 incorporated joint venture with ConocoPhillips, Origin is developing one of Australia’s largest CSG to LNG projects based on Australia’s largest CSG reserves base.
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