All currency AUD unless otherwise stated
- Landmark transaction to accelerate decarbonization of the energy grid and help
Australia progress towards its net zero goals. - Origin is Australia’s largest integrated power generator and energy retailer with a 24% market share of the national electricity market and owner of a 27.5% stake in
Australia Pacific LNG Project (“APLNG”). - Brookfield, its institutional partners and investors GIC and
Temasek will acquire Origin’s Energy Markets business, with Brookfield intending to significantly reduce Origin’s carbon emissions and invest at least$20 billion in new build renewables and storage. - MidOcean Energy is an EIG-formed ‘pure-play’ LNG company that will acquire Origin’s
Integrated Gas business, which includes the interest in APLNG. - MidOcean has entered into a definitive agreement to on-sell a 2.49% interest in APLNG to ConocoPhillips, which intends to assume upstream operatorship of APLNG.
The Scheme values Origin at an enterprise value of
The Origin Board has stated that it is unanimously recommending that Origin shareholders vote in favor of the Scheme in the absence of a superior proposal, and subject to an independent expert concluding the Scheme is in the best interests of shareholders.
Upon closing of the transaction, Brookfield, its institutional partners and investors will own Origin’s Energy Markets business, Australia’s largest integrated power generator and energy retailer. MidOcean will separately own Origin’s
In addition to its institutional and investor partners, Brookfield is also working with Reliance Industries as a strategic partner to assess areas of collaboration in renewable energy in the context of the transaction.
Brookfield is pursuing this acquisition through the Brookfield Global Transition Fund I, which is the largest private fund in the world focused on the transition to net zero. Brookfield Renewable, which has significant available liquidity, expects to invest up to
EIG is pursuing the acquisition of Origin’s
Supporting the energy transition in
Brookfield and EIG view Origin as critical to Australia’s energy transition and energy security. Both parties intend to use the acquisition to create separate platforms that will assist Australia’s transition to a net zero future.
Brookfield intends to accelerate the development of renewable generation capacity for Origin Energy Markets, which is expected to make a material difference to achieving Australia’s net zero targets at this crucial time in its energy transition.
The business plan for Origin Energy Markets contemplates at least
The proposed investment in new-build renewables for Origin Energy Markets would represent approximately one-fifth of the new utility-scale renewable capacity identified by the
In addition to bringing access to necessary capital, Brookfield has significant expertise in renewable power development, global relationships with suppliers and a track record of success. Brookfield is one of the world’s largest owners, operators and developers of renewable power, with approximately 25 GW of generating capacity and a 110 GW development pipeline globally. It has more than 40 years’ experience in scaling large renewable developments in
Origin Energy Markets’ existing 3.1 GW fleet of gas-fired generation and pumped hydro storage provides reliable capacity at peak periods and at times when renewable generation is intermittent. This firming capacity is critical to the build out of scale renewable capacity and will facilitate Australia’s transition to net zero.
MidOcean recognizes that LNG and natural gas are integral to the economies of
APLNG is also critical to the achievement of decarbonization targets within the
Investment highlights (Energy Markets)
- Market-leading: Origin Energy Markets is Australia’s largest integrated power generator and energy retailer with an approximate 24% market share in the NEM, low customer turnover and industry-leading cost to serve. The business benefits from a strong management team that is focused on the transition and is well positioned to respond to evolving energy markets.
- Scale decarbonization opportunity: Brookfield intends to accelerate the build out of significant renewables and storage, enabling the retirement of Eraring, one of Australia’s largest coal plants, and reducing reliance on a carbon-intensive grid, reducing absolute emissions produced by the business by more than 70% by 2030.
$20 billion investment in clean energy: Brookfield’s access to capital and renewable development capabilities will enable investment of at least$20 billion of additional investment during the next decade to build out up to 14 GW of new renewable generation and storage facilities resulting in a more cost effective and flexible portfolio of power generation assets that will benefit Origin’s energy retail customers.- Earnings visibility and stable margins: The regulated price setting regime together with Origin Energy Markets’ position as the largest and lowest cost to serve electricity retailer in
Australia provides earnings visibility and stable margins. - Significant value creation opportunities: Origin is uniquely positioned to benefit from the electrification of the Australian economy, providing customers with an enhanced choice of low-cost services and products such as an expanded retail and distributed energy offerings and other decarbonization services, such as electric vehicle chargers, heat pumps and rooftop solar.
Investment highlights (
- Building an attractive portfolio of world-class assets: APLNG is a tier one, well-capitalized integrated LNG project that is ideally positioned to supply key customers in the
Asia-Pacific region and across the globe. Since its inception, the project has seen approximatelyUS$30 billion of capital investment into high-quality gas reserves as well as downstream processing and associated infrastructure. This transaction complements MidOcean’s existing portfolio of Australian LNG assets recently acquired from Tokyo Gas.
- Enabling the energy transition: This acquisition fits MidOcean’s belief that gas and LNG are critical bridge fuels between the energy systems of today and tomorrow. MidOcean believes that LNG is vital to achieving global energy transition targets, with coal-to-gas switching being a key pathway for top regional carbon emitters to meet both near-and longer-term emissions reduction targets. Natural gas also enables much deeper renewable penetration in power grids whilst ensuring grid resilience. This supports the deeper electrification of economies, which in turn is a crucial element of any roadmap to net zero.
- Leveraging deep operating experience: MidOcean’s management team and Board have deep Australian and global LNG experience. CEO De la
Rey Venter is a 25-year industry veteran, and EIG has 20+ years’ experience in the global LNG sector. MidOcean’s operating experience and credibility, together with its long-term investment horizon, demonstrate its commitment to the safe and sustainable operation of these project interests for the long term.
- High quality long-term contracts with advantaged position to key customers: The project primarily sells LNG under long-dated take or pay contracts to investment grade counterparties in
Asia . It operates at globally competitive breakeven costs and is well positioned to meet growing LNG demand in theAsia-Pacific region .
“As the energy transition gathers pace, 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. Brookfield is determined that the new Origin Energy Markets will lead the way in all respects at this critical moment for the Australian economy.”
EIG CEO
“LNG will be critical in delivering energy transition targets, and this transaction is a compelling opportunity to accelerate EIG’s strategy of gaining exposure to high quality LNG assets around the globe. We have long been attracted to the Australian market, with an established presence in
Brookfield Asia Pacific CEO
“The acquisition of
MidOcean Energy CEO De la
“We’re thrilled to join forces with Brookfield and Origin in this transaction and to further expand our footprint in
Transaction Details
Following further discussions with the Consortium on its revised proposal announced on February 22, 2023, the consideration mix has been amended to comprise
Based on an assumed AUD/USD exchange rate of 0.70, this implies a total consideration of
The total consideration payable will be reduced by any dividends paid by Origin prior to implementation of the Scheme, including the interim
The implied consideration of
- 53.4% to Origin’s closing price of
$5.81 per share onNovember 9, 2022 , being the last trading day prior to the initial proposal by the Consortium; - 59.0% to Origin’s one month VWAP of
$5.60 per share onNovember 9, 2022 ; and - 54.7% to Origin’s three month VWAP of
$5.76 per share onNovember 9, 2022 .
Shareholders will have the total consideration paid in Australian dollars, with the US dollar component converted to Australian dollars based on the prevailing exchange rate at the time of implementation of the Scheme. Shareholders can elect to have the US dollar component paid in US dollars.
The total consideration payable to shareholders will vary subject to currency fluctuations between the date of this announcement and implementation of the Scheme. The consideration mix between Australian dollars and US dollars is expected to change as future US dollar receipts are converted into Australian dollars at the prevailing foreign exchange rate, and if the Consortium elects to convert an additional fixed amount of US dollar consideration to Australian dollars.5
Any conversion from US dollars to Australian dollars would increase the Australian dollar component and reduce the US dollar component of the total consideration.
Origin has also agreed with the Consortium that a fully franked special dividend may be paid to shareholders subject to satisfaction of certain conditions. Any such special dividend will be considered by the Board closer to the time, but prior to implementation, of the Scheme.
A
The Scheme is conditional upon the satisfaction of certain conditions, including:
- Origin shareholders approving the Scheme at a meeting of shareholders (Scheme Meeting);
- court and regulatory approvals including the
Foreign Investment Review Board (FIRB), theAustralian Competition and Consumer Commission (ACCC), the National Offshore Petroleum Titles Administrator and certain other foreign investment approvals; - the issue of an Independent Expert’s Report that concludes that the Scheme is in the best interests of Origin shareholders; and
- customary other conditions, including that no material adverse change occurs prior to implementation.
Citi and MUFG acted as financial advisors to Brookfield on the transaction.
| Contact information | |
| Brookfield Asia Pacific | Consortium |
| +61 477 320 333 | +61 407 966 083 |
| [email protected] | [email protected] |
| Brookfield Renewable | |
| Media: | Investors: |
| +44 7398 909 278 | +1 416-649-8196 |
| [email protected] | [email protected] |
| EIG/MidOcean | |
| +1 212-687-8080 | |
| [email protected] |
About Brookfield Renewable
Brookfield Renewable operates one of the world’s largest publicly traded platforms for decarbonization technologies. Our diversified portfolio consists of hydroelectric, wind, solar, distributed energy and sustainable technology solutions across five continents. We have approximately 25,400 megawatts of installed capacity and a development pipeline with approximately 110,000 megawatts of renewable power capacity, 8 million metric tonnes per annum of carbon capture and storage, 2 million tons per annum of recycled materials capacity and 3 million metric million British thermal units of annual capacity of renewable natural gas projects.
Brookfield Renewable is the flagship listed renewable power company of Brookfield Asset Management, a leading global alternative asset manager with approximately
For more information on Brookfield Renewable please see our website and for more information on the transaction see our presentation here.
About
About EIG and MidOcean
EIG is a leading institutional investor in the global energy and infrastructure sectors with
MidOcean is an LNG company formed and managed by EIG to build a diversified, resilient, cost and carbon competitive LNG portfolio. It reflects EIG’s belief in LNG as a critical enabler of the energy transition and the growing importance of LNG as a geopolitically strategic energy resource. On
For additional information, please visit EIG’s website at www.eigpartners.com or MidOcean’s website at www.midoceanenergy.com
Cautionary Statement Regarding Forward-looking Statements
Certain information in this press release, including statements regarding the acquisition of Origin and the intended separation of Origin Energy Markets (to be owned by a Brookfield-led consortium) and
Non-solicitation
No securities regulatory authority has either approved or disapproved of the contents of this communication. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
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1 Based on 1,728,724,644 diluted shares outstanding and net debt of
2 This differs from the Consortium’s proposal of
3 This amount differs from the
4 Based on 1,728,724,644 diluted shares outstanding and net debt of
5
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