This content is not available in your region

Shell eyes Australia power sector with bid for energy retailer ERM Power

Access to the comments Comments
Shell eyes Australia power sector with bid for energy retailer ERM Power
FILE PHOTO: The logo of Royal Dutch Shell is seen at a petrol station in Sint-Pieters-Leeuw, Belgium January 30, 2019. REUTERS/Yves Herman/File Photo GLOBAL BUSINESS WEEK AHEAD   -   Copyright  Yves Herman(Reuters)
Text size Aa Aa

(Reuters) – Royal Dutch Shell <RDSa.L> has made its first foray into Australia’s power sector with a A$617 million (£345.4 million) takeover offer for ERM Power Ltd <EPW.AX>, which the energy retailer has recommended shareholders should accept.

ERM, the second-largest energy retailer by load in Australia, said on Thursday it had received the proposal from Shell Energy Australia for an all-cash offer valuing it at A$2.465 per share.

The offer represents a 43% premium to ERM’s last close of A$1.72.

Shell, already one of Australia’s biggest gas producers, is looking to use its global scale in oil and gas to build a power business, as the world rapidly shifts towards cleaner energy.

“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 in a separate statement.

Shell said Australia is one of the core markets for its new ‘Emerging Power’ theme, focused on strong growth in renewables to complement traditional fuels.

Trevor St Baker, a major shareholder in ERM, said in a separate statement he plans to vote in favour of the deal in the absence of a higher bid.

(Reporting by Aby Jose Koilparambil and Shriya Ramakrishnan in Bengaluru; Editing by Bernard Orr and Richard Pullin)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on for a limited time.