Trans-Tasman company Tilt Renewables has agreed to a NZ$2.94bn (€1.77bn) takeover bid from Powering Australian Renewables (PowAR), a consortium which includes Australia’s Future Fund and New Zealand company Mercury NZ.

PowAR, a partnership between Australian utility AGL and Queensland state investment manager QIC will buy Tilt’s Australian business for NZ$2.17bn. Tilt’s New Zealand operations, including development options, will be sold to Mercury, currently the company’s second-largest shareholder, at an enterprise value of NZ$770m.

Tilt Renewables’ board said it had entered into a scheme implementation agreement with PowAR and Mercury. The bidders will pay a combined price of NZ$2.94bn for the assets at NZ$7.80 per share.

Bruce Harker, chair of Tilt Renewables, said: “This compelling acquisition proposal is a result of Tilt Renewables’ constant focus on delivering long-term value for shareholders.”

AGL, which created PowAR with QIC and the Future Fund in 2016 as a financing initiative for the development and operation of renewable energy assets, will contribute A$341m to fund its portion of the acquisition of Tilt’s Australian assets.

“Participating in this acquisition aligns with AGL’s climate commitments, and complements our recent acquisitions of Epho and Solgen that have positioned us as Australia’s largest commercial solar provider,” said AGL CEO, Brett Redman.

AGL currently has an installed capacity of 1,313MW across nine operating wind and solar farms in Australia. It has a 20% interest in PowAR.

Redman said the proposed acquisition would provide more renewable energy options in AGL’s generation portfolio, further supporting its orderly transition away from coal-fired power and responding to customers’ increasing appetite for cleaner energy.

PowAR has entered into a voting deed with infrastructure owner, Infratil, which holds a 65.5% stake in Tilt Renewables, to vote in favour of the scheme.

Mercury CEO, Vince Hawksworth, said: “Throughout this transaction, Mercury has worked to keep these New Zealand assets under New Zealand ownership. Completion of this transaction will position Mercury to make an even more significant contribution to New Zealand’s decarbonisation goals.”

Mercury has owned a 19.9% stake in Tilt Renewables since 2018.

Hawksworth said Tilt’s New Zealand wind operations combined with its Turitea windfarm – which was currently under construction – would represent almost 5% of New Zealand’s total generation.

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