Origin suitor Brookfield to soothe ACCC concerns with $20b renewable bonanza

“Brookfield has the capital, expertise, supply chain strength and global track record that’s needed to transform Origin’s generation fleet to greener sources and accelerate Australia’s energy transition while ensuring network security and reliability,” he said.

One key Origin asset that Brookfield would have to decommission is the company’s Eraring power plant, Australia’s largest coal-fired facility. The investment fund maintains that its investments in renewable energy generation and storage facilities should allow it to shut down Eraring without destabilising the power grid.

Origin last year said it would shut down Eraring by 2025, seven years ahead of schedule, citing the weakening economic viability of the facility. The 2880-megawatt generator on NSW’s central coast is responsible for providing 20 per cent of the electricity needed for NSW. Brookfield has confirmed it plans to stick to Origin’s timetable on closing the power station.

On Monday night, Origin, Brookfield and EIG said they had entered into a binding agreement, which Origin Energy’s board intends to unanimously recommend shareholders support when it is eventually put to a vote. The final offer of $8.91 for each Origin share represents a 53 per cent premium to the company’s share price before the initial offer was made in November.

Brookfield on Monday revealed its co-investors would include Singaporean institutional funds GIC and Temasek.

EIG, which is seeking Origin’s 27.5 per cent interest in the Australia Pacific LNG (APLNG) gas venture, said APLNG had an important role to play in the energy transition and would serve as the foundation for the company’s larger LNG ambitions.

The scheme implementation deed, which Origin released to the ASX on Tuesday, said the parties expected to submit a draft application for merger authorisation by April 14.

“The board is unanimous in its view that this transaction is in the best interests of shareholders,” Origin chairman Scott Perkins said. “The transaction represents a significant premium to the share price prior to the original indicative proposal, and reflects the strategic nature of Origin’s platform, its growth prospects and anticipated earnings recovery.”

As the energy grid’s shift away from coal-fired power continues to gather speed, Brookfield’s chairman, Mark Carney, said Brookfield believed Origin could “lead the way … at this critical moment for the Australian economy”.

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“What’s needed is increasingly clear: faster deployment of large-scale renewables, the accelerated, responsible retirement of coal generation, and an interim, supportive role for gas as the dependable back-up fuel,” Carney said.

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