The logo of Australian energy company Origin is pictured in Melbourne, Australia, on July 3, 2016.JASON REED/Reuters
Australia’s antitrust regulator has approved a Brookfield Corp-led consortium’s A$15.35 billion (US$9.76 billion) bid for Origin Energy, clearing the way for one of the year’s largest corporate buyouts in the country to seek shareholder consent.
Origin shares jumped 5.3% to A$9.19 in early trading, well above the A$8.91 per share price of the consortium bid lodged in March.
The Australian Competition and Consumer Commission (ACCC) said on Tuesday the purchase of the country’s second-largest power generator was likely to speed up Australia’s renewable energy transition and could lead to a more rapid decrease in greenhouse gas emissions.
“After a detailed review, we are satisfied that the proposed acquisition is likely to result in public benefits that would outweigh the likely public detriments,” ACCC chair Gina Cass-Gottlieb said in a statement.
Origin said the ACCC approval was an “important milestone” in the acquisition process.
The deal still requires shareholder approval by 75% of votes cast. Australian Super, the largest investor, raised its stake to 14% last month and called the shares undervalued.
“Australian Super holds a large stake and could form a voting bloc big enough to cause issues for the deal,” said Max Vickerson, an analyst at stockbroker Morgans. “I’m not sure how much higher the buyers are prepared to go, but they have been pretty persistent so far.”
Australian Super did not respond immediately to a request for comment.
Under the consortium deal, Origin will be broken up into two businesses, with its energy markets arm including its electricity generation and electricity and gas retail businesses to be acquired by Brookfield.
U.S. private equity firm EIG’s MidOcean Energy, the other consortium partner, will take control of Origin’s integrated gas business.
The ACCC decision had been closely watched as Brookfield’s ownership of AusNet Services, a Victoria-based transmission company that has electricity and gas distribution networks, was identified by analysts as a potential concern for the regulator.
The regulator said Brookfield would have to commit to having two separate management groups for Origin and AusNet that had no involvement with each other.
Brookfield would also be prohibited from selling more than 10% of either Origin or AusNet in the future to one party.
“These commitments are intended to reduce the likelihood of Brookfield or AusNet engaging in certain conduct that would favour Origin or otherwise disfavour Origin’s rivals,” Cass-Gottlieb said.
Brookfield plans to house the energy markets business in its global transition fund, which it said was the largest private fund in the world focused on the transition to net zero emissions.