Meridian agrees to sell Australian business to Shell consortium for $ 752 million
KIRK HARGREAVES / Tips
Meridian is New Zealand’s largest producer of renewable energy.
Meridian has agreed to sell its Australian operations to a consortium of Shell and Infrastructure Capital Group for A $ 729 million (NZ $ 752 million).
Shell will own the Powershop Australia retail business while ICG will own the infrastructure assets, including the Mt Mercer and Mt Millar wind farms, the Hume, Burrinjuck and Keepit hydropower plants and the development assets.
The sale is subject to certain conditions, including obtaining Shell foreign investment approval from the Australian government. The deal is expected to be finalized in the first quarter of 2022.
Meridian Energy chief executive Neal Barclay said the transaction was an exceptional result for Meridian shareholders.
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This is a testament to the quality of the Meridian Energy Australia company and its staff, he said.
Shell and ICG intended to expand their renewable energy and retail presence in Australia, he said.
“With emissions being the problem and renewables the solution, buyers are ready to invest heavily in a cleaner future,” Barclay said.
Agreements have been put in place with Flux Federation, a subsidiary of Meridian, for Powershop Australia’s retail software services and Meridian Energy Australia’s call center based in Masterton, he said.
The agreements will be in place for at least three years, he said.
A transition services agreement was reached which would allow a transition of the services currently provided by Meridian Energy Limited to Meridian Energy Australia for a period of up to one year, he said.
Meridian would continue to review capital structure, dividend policy and future opportunities for product reinvestment as it nears settlement.
An update would be provided during the presentation of the company’s interim results on February 23.