Tilt Renewables agrees to $2.1 billion deal in biggest NZ M&A this year

By Shashwat Awasthi

(Reuters) – New Zealand’s Tilt Renewables Ltd said on Monday it would be acquired by a consortium including its second-largest shareholder, AGL Energy Ltd, and Australia’s sovereign wealth fund, for NZ$2.94 billion ($2.10 billion).

The first major deal of the year in New Zealand, which comes amid a push towards decarbonisation and clean energy, will see Tilt shareholders get NZ$7.80 for every share, a 20.4% premium to the company’s share price at Friday’s close.

Powering Australian Renewables (PowAR), a partnership between AGL, investment manager QIC and the Future Fund, will acquire Tilt’s Australian business, while 19.9%-shareholder Mercury NZ Ltd will buy its New Zealand business.

The deal will give the consortium access to the New Zealand-based energy and transport infrastructure investor’s 20 operational and under-development wind farms in Australia and New Zealand.

“The Board is pleased that, with these new owners, the transition to renewables in Australia and New Zealand will continue to accelerate,” Tilt Chairman Bruce Harker said.

Infratil Ltd, Tilt’s largest shareholder, and Mercury NZ have agreed to vote in favour of the deal, the company said, adding that a meeting to vote on the agreement would likely be held in about four months.

In separate statements, Infratil said it expected to fetch about NZ$1.93 billion from the sale of its 65.5% stake in Tilt, while Mercury NZ said the deal would be immediately accretive and add NZ$50 million to its 2022 earnings.

Completion of the transaction will position Mercury NZ to make an even more significant contribution to New Zealand’s de-carbonisation goals,” said the company’s chief executive, Vince Hawksworth.

Tilt, which listed in New Zealand in 2016, granted access to its books last month to a number of parties, after rejecting an offer from Australia’s largest pension fund in December last year.

($1 = 1.3974 New Zealand dollars)