Power generator and retailer Mercury NZ said it will buy Trustpower’s retail business for $441 million once it meets several conditions including Commerce Commission approval.
The two businesses have entered into a binding agreement which is also conditional on the restructure of Tauranga Energy Consumer Trust (TECT) and Trustpower shareholder approval.
Trustpower’s retail business sells electricity, gas, fixed and wireless broadband and mobile phone services to about 231,000 customers nationwide.
Combined, the businesses would have about 780,000 connections across both energy and telco services.
In a statement, Mercury chief executive Vince Hawksworth said the acquisition would accelerate Mercury’s retail strategy, which is centred on delivering the right product mix and value for customers.
“Mercury and Trustpower are two highly complementary organisations, and this agreement would see the best of both being brought together for our customers,” he said.
“We know customers value the convenience and ease of bundled services in their home and Trustpower has deep expertise in bundling products in a way that people clearly appreciate. We see this adding material value to our customers and Mercury.
“Bringing together the retail businesses of Mercury and Trustpower will also give us the scale to make meaningful investment in the underlying IT systems, driving greater innovation for our customers.”
Hawksworth said the strength of Trustpower’s retail offering was underpinned by a skilled and motivated team, with about 500 staff focused on retail, based in Tauranga and Ōamaru.
“We see a huge amount of talent and capability across both organisations, each with a strong focus on delivering the best possible outcomes for customers. We’re excited for how we can continue to build on this together.
“Customers will continue to enjoy all the great services and support they have today with Trustpower and with Mercury and we’re looking forward to unlocking even more benefits and products for them over time.”
Trustpower is 51 owned by infrastruture investor Infratil.
In a statement, Infratil said it was supportive of the sale and intends to vote in favour of the deal at the Trustpower annual shareholder meeting in September.
The two businesses won’t be fully integrated until their IT systems allow for an improved customer experience.
Mercury has secured a commitment for a new bank facility sufficient to finance the acquisition.
The transaction is conditional on Mercury obtaining Commerce Commission clearance for the purchase of Trustpower’s retail business. Mercury will be working with the Commerce Commission to progress the application as efficiently as possible once filed.
The transaction is also conditional on the proposed TECT restructure being completed and shareholder approval. Local retail customers will remain beneficiaries of the trust following any sale.
The timing for regulatory approvals depends on several factors, including the current workload of the regulator. Mercury anticipates these conditions will be fulfilled and the transaction will be complete by the end of the year.
Source: Read Full Article