October 10, 2023

ACCC clears Canadian fund’s $18.7b takeover of Origin Energy

By Simon Johanson
October 10, 2023 — 10.11am
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Australia’s competition watchdog has approved the $18.7 billion takeover of the nation’s biggest energy retailer by Canadian fund giant Brookfield and its consortium partner MidOcean, saying the public benefits of the deal outweigh its negative impact on competition.

The Australian Competition and Consumer Commission said its decision on the deal was “finely balanced,” but it went in the consortium’s favour after a detailed review found the acquisition was likely to result in public benefits that would outweigh the potential public detriments.

Brookfield has outlined ambitious plans to spend another $20 billion to $30 billion on renewable energy projects.

ACCC chair Gina Cass-Gottlieb said Brookfield’s proposed investment of up to $30 billion to accelerate the rollout of renewable energy projects would lead to a more rapid reduction in Australia’s greenhouse gas emissions.

“We found that the public benefits and public detriments in this matter were finely balanced. Likely detriments, particularly anticompetitive effects from vertical integration, had to be weighed against likely benefits to Australia’s renewable energy transition,” Cass-Gottlieb said.

Brookfield and MidOcean’s high stakes bid for Origin began last November, when the electricity retailer opened its books to its suitors after they lobbed a surprise $9-a-share bid to buy the company and divide its assets between them. Origin’s board eventually accepted an $8.91 a share offer in a deal structured to increase the bid price by 4.5c a month if the completion was delayed beyond November 30 this year, valuing Origin now at $18.7 billion, including debt.


Under the deal’s terms, Brookfield will end up with Origin’s power generation and retailing division, which supplies about 4.5 million customer accounts. MidOcean Energy – a liquefied natural gas company formed by US-based global energy investor EIG – will acquire Origin’s interest in a Queensland LNG joint venture, Australia Pacific LNG.

Origin said the regulator’s decision was an “important milestone,” but the transaction still needed approval from a majority of shareholders as well as the nod from other regulators including the Foreign Investment Review Board and the National Offshore Petroleum Titles Administrator.

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Simon Johanson is a business journalist at The Age and The Sydney Morning Herald.Connect via Twitter.


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