Australian regulator clears Origin takeover

Australia’s competition regulator has approved Origin Energy’s takeover by a consortium consisting of Canada’s Brookfield Asset Management and a unit of US-based energy investor EIG.

The Australian Competition and Consumer Commission (ACCC) announced in a statement on Tuesday had granted authorization with conditions for the proposed acquisition of Origin by Brookfield and MidOcean.

Origin said in a separate statement that the ACCC’s decision marks an “important milestone” in the proposed acquisition of Origin and the parties will continue to progress with the next steps in the scheme process.

The company noted that the transaction remains subject to the satisfaction of outstanding conditions, including additional regulatory approvals by the Foreign Investment Review Board, National Offshore Petroleum Titles Administrator, and certain other foreign investment approvals.

Brookfield and EIG’s LNG unit MidOcean Energy first made an offer in August last year to acquire Origin for A$7.95 cash per share. Subsequently, they raised the offer to A$9.00 cash per share in November last year, and revised this offer again to A$8.90 per share in February this year.

The consortium and Origin entered into a binding deal in March this year.

The scheme values Origin at an enterprise value of A$18.7 billion ($11.95 billion).

APLNG

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.

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, it previously said.

Moreover, EIG’s MidOcean will separately own Origin’s integrated gas segment including its upstream gas interests and the 27.5 percent stake in Australia Pacific LNG (APLNG).

ConocoPhillips has a 47.5 percent share in the APLNG project but it also operates the 9 mtpa LNG export facility on Curtis Island near Gladstone and the export sales business.

Origin operates APLNG’s gas fields and holds a 27.5 percent share. China’s Sinopec owns a 25 percent share in APLNG as well.

MidOcean has entered into an agreement to on-sell a 2.49 percent interest in APLNG to ConocoPhillips, while the latter also intends to take over upstream operatorship of APLNG.

In addition, energy behemoth Saudi Aramco recently agreed to buy a minority stake in MidOcean Energy, the LNG unit of EIG.

The strategic partnership with MidOcean marks Aramco’s first international investment in LNG.

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