Origin Rejects Takeover Deal

Jennifer Leakos
Origin Energy headquarters
Courtesy of Bloomberg

A $12.7 billion dollar bid by Brookfield to buy one of Australia’s largest power providers, Origin Energy, was turned down by Origin’s shareholders. It seems like there just wasn’t the right spark between the utility and the asset manager (dads chuckle, everyone else eye-rolls).

What happened: On Monday, shareholders of Origin voted against a takeover bid by Brookfield Asset Management and EIG Partners. 

  • Origin is an energy generator (with coal, LNG, and renewables) and retailer with over four million customers. Brookfield is a Canadian investment company with $725 billion in assets partnered with EIG, an American investment firm with $45 billion in its portfolio.

Brookfield and EIG had originally put in a bid last November  but it looks like they didn’t have the rizz to convince the shareholders.

The tea: Origin’s shareholders were against the deal, with the company itself making a statement that it was “not in the best interests of Origin or its shareholders”. A full 69 percent of shareholders voted in favor of the acquisition, but shy of the 75 percent needed for it to go through.

  • AustralianSuper, a pension fund that owns 17 percent of Origin Energy and is its largest shareholder, has been openly opposed to the bid, saying it was too low of an offer.  

The net-zero future: Brookfield was planning to break up Origin Energy and build out more renewable energy capacity, while EIG Partners would take over the Australia Pacific LNG project. 

  • Origin currently has plans to build out 4 gigawatts of renewables, but Brookfield wanted to invest up to $30 billion AUD to build out more than triple that capacity, totalling 14 gigawatts.

Zoom out: Brookfield already has a large renewable portfolio and saw the move as a way to “offer a clear pathway to of faster reduction of the company’s (Origin’s) emissions”.

AustralianSuper said they would be willing to shell out the money to help with the energy transition needed to reduce Australia’s reliance on fossil fuels if it wants to meet its recently raised net-zero climate targets.