ACCC clears $18.7 billion Brookfield & MidOcean bid for Origin Energy

Company News

by Glenn Dyer

The ACCC announced on Tuesday morning that it has granted conditional clearance to the $18.7 billion bid for Origin Energy (ASX:ORG) by Brookfield and MidOcean. After extensive studies, the Commission has decided to clear the deal, leaving shareholders with the final decision.

Brookfield and MidOcean have offered $8.912 in cash for each Origin share. Origin shares have traded well below that price at around $8.73, indicating market confidence in the deal.

The proposed deal consists of two interdependent transactions. It will result in a consortium led by the Brookfield Global Transition Fund owning Origin's energy markets business, including electricity generation and electricity and gas retail businesses. MidOcean will own Origin's upstream gas interests, primarily based in Queensland.

Under the Competition and Consumer Act, the ACCC must not grant authorisation unless it is satisfied that the proposed acquisition would not substantially lessen competition or that the public benefits would outweigh the public detriments.

ACCC Chair Gina Cass-Gottlieb stated, "On the first limb of the test, we are not satisfied that the proposed acquisition would not 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."

Cass-Gottlieb added, "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."

Origin acknowledged the ACCC's decision in a separate statement, noting that it is preparing the relevant documentation for the bid, which will be sent to shareholders in the coming weeks.

While there are some concerns about the proposed price among investors, there has been no significant public opposition or indication that the deal could be voted down at shareholder meetings.

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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