Australia’s AGL Energy to buy Macquarie Generation for A$1.505 bn
12 Feb 2014
Australian gas and electricity retailer AGL Energy Ltd today agreed to buy Australian state-owned power company Macquarie Generation for A$1.505 billion ($1.36 billion).
AGL intends to fund the transaction through a renounceable rights issue to existing shareholders raising approximately $1.2 billion and $350 million of bank debt.
AGL, Australia's largest gas and electricity retailer, said that the acquisition is conditional on approval by the Australian Competition & Consumer Commission (ACCC). The ACCC has previously indicated that it will make a final decision on the proposed acquisition by 4 March 2014.
Macquarie Generation is a New South Wales state-owned power company established in 1996.
The Newcastle-based company owns and operates Liddell Power Station and Bayswater Power Station between Singleton and Muswellbrook in the Upper Hunter Valley of NSW and produces approximately 13 per cent of the electricity needed by people in eastern Australia from South Australia to Northern Queensland.
This is equivalent to 40 per cent of the electricity needed by the people of New South Wales, making Macquarie Generation one of Australia's largest electricity generators.
AGL's managing director, Michael Fraser, said, ''The acquisition of Macquarie Generation is consistent with our integrated strategy and will enable AGL to remain a robust competitor to the major electricity retailers in New South Wales. It will also mean that the State's largest generation assets are owned by a company with the financial capacity and operating experience to maintain reliability of supply.''
The Macgen power stations would give AGL ownership of the lowest cost, large-scale baseload generators in New South Wales and would increase AGL's registered generation capacity by approximately 79 percent to more than 10,600 MW.
This would bring AGL's share of generating capacity in the National Electricity Market to approximately 21 percent and add to AGL's diverse portfolio of renewable and thermal generation assets.
