Australia’s market regulator has given the green light for the $18.7 billion takeover of Origin Energy, the country’s largest energy retailer, by private equity giants Brookfield and EIG Partners. However, the approval comes with a significant condition: the new owners must undergo independent audits to ensure they don’t engage in discriminatory practices against rival firms.
The Australian Competition and Consumer Commission (ACCC) made this announcement on Tuesday, signaling that it would not stand in the way of the acquisition. Nevertheless, additional approvals, including one from the Foreign Investment Review Board, are required before the deal can be finalized, reported The Guardian.
ACCC Chair Gina Cass-Gottlieb emphasized that Brookfield’s substantial 45.4% stake in AusNet, the former ASX-listed Victorian energy transmission unit, necessitates careful monitoring, particularly in Victoria, to prevent any actions that could impede the plans of other energy companies. She stated that the decision to approve the takeover was “finely balanced” after a thorough evaluation of its benefits and drawbacks.
Cass-Gottlieb acknowledged the subtle nature of the potential for Brookfield to use its increased market influence to benefit its own businesses, making it difficult to detect. However, the ACCC believes that this potential discrimination can be mitigated through annual audits and the establishment of separate teams and personnel for Brookfield and AusNet.
AusNet plays a pivotal role in the Victorian high-voltage electricity transmission system and provides electricity to approximately 802,000 customers in the state, according to the regulator. The ACCC has specified that Brookfield must take action, including employee dismissal, if any intentional discrimination in favor of Origin in terms of grid access by AusNet is proven.
A crucial factor in securing approval was Brookfield’s commitment to expediting the adoption of renewable energy and energy storage technologies. This commitment aligns with Australia’s efforts to accelerate the reduction of greenhouse gas emissions.
Source: The Guardian