Origin gets ACCC nod for Brookfield, MidOcean acquisition
Australia's Origin Energy, the country's largest integrated energy company, announced on October 10 that it has received approval from the Australian Competition and Consumer Commission (ACCC) for its proposed A$18.7bn ($12bn) acquisition by the consortium comprising Brookfield Asset Management and MidOcean Energy, a unit of EIG.
The ACCC's approval is granted on the basis of undertakings which have been provided separately by Brookfield, the former ASX-listed Victorian energy transmission business AusNet, and MidOcean. Brookfield also owns a 45.4% stake in AusNet.
"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," Origin said.
Origin stated 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.
According to the deal, Brookfield would acquire Origin's energy markets business and MidOcean would acquire the integrated gas business including a 27.5% interest in Queensland-based Australia Pacific LNG (APLNG). APLNG is the largest producer of coalbed methane and supplies gas to Queensland's domestic gas market, while also processing CBM into LNG for exports.
"The ACCC considers that the acquisition will likely result in an accelerated roll-out of renewable energy generation, leading to a more rapid reduction in Australia's greenhouse gas emissions," ACCC chair Gina Cass-Gottlieb said.
Cass-Gottlieb said that on the first limb of the test, ACCC was not satisfied that the proposed acquisition would not be likely to substantially lessen competition.
"However, 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,” she said.
“We found that the public benefits and public detriments in this matter were finely balanced. Likely detriments, particularly anti-competitive effects from vertical integration, had to be weighed against likely benefits to Australia’s renewable energy transition. We considered undertakings offered by Brookfield, AusNet and MidOcean in this weighing process," she added.
Brookfield has said it will invest between A$20bn and A$30bn by 2033 in renewable energy and storage if the deal goes through.