Sembcorp, the Singaporean energy giant, has taken over Alinta Energy for $4.3 billion.
Sembcorp Industries announced on Thursday that its unit would?acquire?Alinta Energy at a cost of A$6.5 billion (4.32 billion dollars), making it one of the biggest overseas expansions in the history for the Singaporean firm.
Alinta Energy was acquired by Chow Tai Fook Enterprises. The energy company now controls one of Australia’s largest integrated gas and power retailers with 1.1 million customers, and 3.4 gigawatts in energy generation capacity, including gas, coal, and solar.
Chow Tai Fook is the investment arm for Hong Kong billionaire Henry Cheng. In 2017, Chow Tai Fook acquired Alinta Energy for A$4 Billion. Chow Tai Fook has made a significant step forward in its reorganization after hiring advisors to examine options for the company earlier this year.
Sembcorp also said that it would?acquire? assets from Latrobe Valley Power Holdings, Pioneer?Sail Holdings, and Latrobe Valley Power Holdings. Specific details were not revealed.
Sembcorp will gain access to Alinta Energy’s 10,4 GW pipeline of development, which includes offshore and onshore winds, pumped-hydro and firming systems. This deal will help Sembcorp maintain its position as Australia strives for net zero energy by 2050.
According to Sembcorp, the Australian Energy 'Market Operator' estimates that Australia will need 200 GW new solar, wind and storage capacity before mid-century.
Sembcorp confirmed Monday that it was evaluating possible acquisitions including Alinta after media reports of ongoing negotiations. The deal, they said, will be immediately earnings-accretive.
Sembcorp estimates that the acquisition will increase its earnings per share to S$0.626 and boost its return on equity from 20.3% to 22.3% for the year ended December 31, 2024.
Sembcorp said that the acquisition provided a "readymade growth pipeline" for Australia, an AAA-rated market with stable policies, and avoided the challenges of creating new assets from scratch.
(source: Reuters)
