Royal Dutch Shell plans to enter Australia’s highly competitive power sector by acquiring the second-largest energy retailer in the country for AUD617 million (USD418 million), less dividend adjustments payable by ERM Power Ltd.
A leading commercial and industrial (C&I) electricity retailer in Australia, ERM Power is also an electricity generator, owning and operating two gas-fired generation plants. Gas-fired generation will play an important role in Australia’s transition to renewables, according to Shell.
“This acquisition aligns with Shell’s global ambition to expand our integrated power business and builds on Shell Energy Australia’s existing gas marketing and trading capability,” Shell Australia’s Country Chair Zoe Yujnovich said. Shell Energy Australia Pty Ltd is a subsidiary of Royal Dutch Shell plc.
“ERM will become our core power and energy solutions platform and this acquisition is a significant step forward in growing Shell’s integrated power business in Australia,” she said.
The acquisition has received Foreign Investment Review Board and Australian Competition and Consumer Commission approvals and Shell’s offer is subject to court approval as well as ERM shareholder approval.
The acquisition is expected to be completed before the end of 2019.