Brookfield, EIG Consortium Ink Pact to Acquire Origin Energy for A$18.7bn

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A consortium comprised of Brookfield Renewable Partners, together with institutional investors GIC and Temasek, and MidOcean Energy of leading investor EIG will be acquiring 100% shares of Origin Energy Limited. The parities have signed a Scheme Implementation Deed. Origin Energy is Australia’s largest integrated power generator and energy retailer.

The Scheme values Origin at an enterprise value of A$18.7 billion. Upon closing of the transaction, Brookfield, its institutional partners and investors will own Energy Markets business of Origin.

MidOcean will separately own Origin’s Integrated Gas segment. Brookfield is also working with India’s Reliance Industries as a strategic partner to assess areas of collaboration in renewable energy in the context of the transaction.

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Brookfield said that its 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 US$750 million. According to Brookfield, this will be funded through a mix of corporate debt, up-financings of existing hydro assets and proceeds from asset recycling initiatives.

Enabling Energy Transition in Australia and Asia Pacific

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.

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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 A$20 billion of additional investment during the next decade to construct up to 14 GW of new renewable generation and storage facilities in Australia.

This is expected to enable the retirement of one of Australia’s largest coal-fired power generation plants, Eraring, and will be undertaken with the highest regard for network reliability and security.

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 Australian Energy Market Operator that is required to be developed across the National Electricity Market (NEM) through to 2030.

Mark Carney, Chair, Brookfield Asset Management and Head of Transition Investing, said, “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.”