Brookfield, EIG Consortium Seal A$18.7 Billion Deal to Buy Origin Energy
Brookfield aims to expedite the development of renewable energy generation capacity
A consortium of Brookfield Asset Management and MidOcean Energy, the global LNG platform owned and managed by EIG, has agreed to acquire Australia-based integrated power generator and retailer Origin Energy for A$18.7 billion (~$12.5 billion).
As part of its acquisition of Origin Energy’s Energy Markets segment, Brookfield plans to expedite the development of renewable energy generation capacity. Brookfield has formulated a business plan for Origin Energy Markets that involves investing at least $20 billion over the next ten years to construct up to 14 GW of new renewable generation and storage facilities in Australia.
This is expected to enable the retirement of one of Australia’s largest coal-fired power generation plants.
The consortium has entered a binding deed with Origin Energy and agreed to purchase the company for A$8.9 (~$6) per share.
After the acquisition, Origin Energy will be divided into two businesses: Energy Markets and Integrated Gas. Brookfield will own Energy Markets, primarily responsible for power generation and retailing, while MidOcean will own Integrated Gas.
Brookfield will lead the investment with its $15 billion Global Transition Fund and institutional partners GIC of Singapore and Temasek.
Brookfield is pursuing this acquisition through the Brookfield Global Transition Fund I, the largest private fund in the world focused on the transition to net zero.
Brookfield Renewable expects to invest up to $750 million, which will be funded through a mix of corporate debt, up financings of existing hydro assets, and proceeds from asset recycling initiatives.
MidOcean has agreed to on-sell a 2.49% interest in the Australia Pacific LNG project (APLNG) to ConocoPhillips, already a 47.5% owner in APLNG. ConocoPhillips is the current downstream operator and intends to take over the upstream operatorship of APLNG.
EIG is pursuing the acquisition of Origin’s Integrated Gas business through MidOcean Energy.
Origin Energy Markets’ existing 3.1 GW fleet of gas-fired generation and pumped hydro storage provides reliable capacity at peak periods and when renewable generation is intermittent.
Last June, Brookfield announced the final institutional close of a $15 billion raise for the Brookfield Global Transition Fund (BGTF), focused on facilitating the global transition to net zero.
Brookfield had raised $7 billion in the initial close of BGTF.