Meridian to Sell Aussie Biz to Shell & ICG Consortium for $5278 M

Highlights :

  • Completion is expected to occur in the first quarter of 2022.
  • On completion, Shell will become the owner of the retail business, Powershop Australia, while ICG will become the owner of the infrastructure assets.

New Zealand electricity generator and retailer Meridian Energy is selling its Australian business to a consortium of Shell Energy Operations Pty Ltd, a wholly owned subsidiary of Shell and Infrastructure Capital Group (ICG) for A$729 million ($527.80 million), subject to possible adjustment depending on the timing of completion.

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On completion, Shell will become the owner of the retail business, Powershop Australia, while ICG will become the owner of the infrastructure assets (Mt Mercer and Mt Millar wind farms, Hume, Burrinjuck and Keepit hydro power stations and development assets).

The sale is subject to limited conditions precedent including Shell receiving foreign investment approval from the Australian Government. Completion is expected to occur in the first quarter of 2022.

The transaction represents an exciting opportunity for the future of the Meridian Energy Australia business, given Shell’s and ICG’s intentions to grow their respective renewable energy and retail presences in Australia.

“With emissions the problem, and renewable energy the solution, the buyers are readying to invest heavily in a cleaner future. The Meridian Energy Australia team will be at the heart of a transformation that is not only good for Australia, but also the planet,” says Meridian Chief Executive Neal Barclay.

Agreements have been put in place with Flux Federation, a Meridian subsidiary, for Powershop Australia’s retail software services and Meridian Energy Australia’s call centre based in Masterton. These agreements will be in place for minimum of three years.

In addition, a transitional services arrangement has been agreed, which will allow for a transition of services currently provided by Meridian Energy Limited to Meridian Energy Australia for a period of up to 12 months.

As previously announced by Meridian, Jason Stein, CEO of Meridian Energy Australia and Powershop Australia, will continue in his role until 31 March 2022 or the completion of the sale.

Lazard Australia acted as Meridian Energy’s Financial Advisor in respect of this transaction.

Shell Energy, the second largest electricity provider to commercial and industrial businesses in Australia, operates 662 megawatts of gasfired peaking capacity with power stations in Western Australia and Queensland. It is currently developing the 120-megawatt Gangarri solar energy project in Queensland. Shell Energy Australia Pty Ltd and its subsidiaries, including Shell Energy Operations Pty Ltd, trade as Shell Energy.

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