Origin acquires Integral and Country retail businesses
Origin Energy Ltd (ASX: ORG) today confirmed executing sale and purchase agreements with the NSW government to acquire the retail businesses of Integral Energy and Country Energy, and entering into GenTrader arrangements with Eraring Energy, for $3.25 billion.
Origin Chairman, Mr Kevin McCann said, "The acquisition is a transformational event in the growth of Origin.
"Following completion of the transaction, Origin will be Australia's largest energy retailer with 4.6 million customer accounts and will have one of the country's largest and most diverse generation portfolios with more than 5,800 MW of capacity, through either owned generation or contracted rights.
"Origin will fund the transaction with new debt facilities, which are expected to be partly refinanced with a pro-rata equity offering to be conducted within 12 months.
Origin said the acquisition price of $2,300 million for the Integral Energy and Country Energy retail businesses includes the wholesale portfolio and NSW stamp duty.
The combined mass market retail business has been acquired for $1,282 per customer account. The cost of the combined wholesale portfolio is valued at $0.35 per MWh.
Integral Energy has NSW's second largest electricity customer base with an incumbent position in growth corridors in the State, along with customers across the NEM.
Country Energy has an incumbent market position in regional NSW and electricity and natural gas customer accounts in six states and territories.
In the 2010 financial year, Integral Energy and Country Energy customers combined consumed 27 TWh of electricity and 4.5 PJ of natural gas, with total revenues of $3.8 billion.
The Eraring GenTrader arrangements will be acquired for $950 million representing $313/kW and provide flexible baseload and peaking generation capacity at a significant discount to the 'new entrant' cost to build.
Under the GenTrader arrangements, Origin will supply the fuel, pay the agreed charges, and have the right to dispatch and sell electricity output while Eraring Energy will own, operate and maintain the power stations.