Origin Energy (ASX:ORG) agrees to $18.7b takeover

• Origin Energy (ORG) agrees to an $18.7 billion takeover by a consortium comprising Brookfield Asset Management and MidOcean Energy
• The proposed takeover would see Origin split into two separate businesses: Integrated Gas and Energy Markets
• The proposed deal values Origin shares at $8.91, based on an AUD/USD exchange rate of 70 cents — revised from $7.95 per share in the consortium’s November offer
• The parties are targeting implementation of the deal by early 2024, subject to shareholder and regulatory approvals
• ORG shares are up 0.9 per cent and trading at $8.25 at 1:39 pm AEDT

Origin Energy (ORG) has agreed to an $18.7 billion takeover by a consortium comprising Brookfield Asset Management and MidOcean Energy.

The proposed takeover would see Origin split into two separate businesses: Integrated Gas and Energy Markets.

Additionally, ConocoPhillips has agreed to acquire a 2.49 per cent interest in Australia Pacific LNG from MidOcean following the implementation of the scheme. Origin said steps had begun for an “orderly transfer” of its service provider roles to Conoco.

The proposed deal values Origin shares at $8.91, based on an AUD/USD exchange rate of 70 cents — a revised proposal to the November offer from the consortium of $7.95 per share.

Origin Chairman Scott Perkins said the transaction represented a significant premium to the ORG share price prior to the original indicative proposal and reflected the “strategic nature” of Origin’s platform, its growth prospects and anticipated earning recovery.

Moreover, Origin’s CEO Frank Calabria said the company believed the transaction stood to benefit the broader Australian community.

“It will unlock significant capital that can help the energy transition and deliver benefits in the form of cleaner, smarter and lower-cost energy for our nation over time,” Mr Calabria said.

While the board supports the deal, shareholder approval is needed for it to go through, as well as court and regulatory approvals.

The parties are hoping to seal the deal early in the 2024 calendar year.

ORG shares were up 0.9 per cent and trading at $8.25 at 1:39 pm AEDT.