Dutch multinational oil and gas company Shell is believed to be lining up in the contest for Meridian Energy’s $1bn Australian renewable energy business, taking on competitors such as Ampol, Telstra, Engie and Origin Energy.
Shell is believed to be bidding for the portfolio of energy assets through its Australian business ERM Power.
Shell purchased ERM Power in 2019 for $617m, and at that time it was expected to be the start of a spending spree in Australia by large multinationals in the energy sector, as they started examining solar farm and wind farm sites.
The Meridian Energy Australia business contains renewable electricity generation assets. They are attractive to companies like Shell because it can handle the risky nature of the projects and is eager to gain exposure to clean energy.
There had been suggestions that Shell could look at Origin Energy’s retail markets business should Origin embark on a spin-off of its upstream gas assets.
When it comes to acquisitions, Shell is said to be focused on how it can integrate assets with its global gas business.
It also has a desire to invest in clean energy.
However, the challenge with respect to Australia is finding environmentally friendly energy takeover targets of scale, given that most of the country’s power generation comes from coal.
ERM is the only energy retailer licensed to sell electricity for small business in all states and, since launching in 2007 by Trevor St Baker, it has grown to be the fourth-largest seller of electricity in the nation.
It buys most of its energy through trading contracts, which is an area of expertise for Shell.
Shell is active in every area of the oil and gas sector, including exploration, production and distribution, petrochemicals, power generation and trading.
Meanwhile, DataRoom can reveal that Origin Energy is looking at the Meridian business on offer.
Engie has already hired Bank of America as part of its pursuit and is gunning hard for the portfolio, while Ampol is working with Royal Bank of Canada.
Telstra is also known to be looking, attracted to the opportunity to gain more telecommunications customers from the energy retail business.
Meridian’s Australian operation has a retail business branded Powershop Australia, which delivers electricity to 140,000 customers and gas to 40,000 customers.
The New Zealand-based Meridian Energy is selling its Australian business through Lazard. It also owns 294MW of renewable generation capacity and 150MW of renewable development opportunities.
The price for the portfolio is expected to be about $1bn.
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