June 25 (Bloomberg) -- Australia’s competition tribunal cleared AGL Energy Ltd.’s A$1.51 billion ($1.41 billion) deal to acquire government-owned power plants in the nation’s most populous state, overturning a regulator’s decision.
The approval is subject to conditions and must be completed by June 2015, the Australian Competition Tribunal ruled today.
The decision clears the way for AGL to acquire Macquarie Generation’s two coal-fired power plants, which account for more than a quarter of electricity capacity in New South Wales. The Australian Competition & Consumer Commission in March stopped AGL’s bid on concerns it would reduce competition.
“We have consistently argued the acquisition of MacGen by AGL would not lead to a substantial lessening of competition and would bring public benefits to the people of New South Wales,” AGL Managing Director Michael Fraser said today in a statement. “Today’s decision vindicates that view.”
While the tribunal’s decision can be appealed within 28 days, it “is likely to be final,” according to a June 23 report by Bank of America Merrill Lynch.
The regulator is disappointed with the tribunal’s ruling, according to its e-mailed statement today.
“The ACCC remains of the view that privatization of these assets to an alternative bidder would achieve a more competitive outcome, which in turn will benefit NSW consumers,” it said.
AGL, Australia’s second-largest electricity retailer, has said it plans to fund the deal through a A$1.2 billion share sale to existing holders and A$350 million of bank debt.
Macquarie Generation is the lowest-cost, large-scale baseload generator in the state with a total capacity of about 4,600 megawatts, according to AGL.
The government said earlier this year that it would to use the proceeds from the sale, which includes the Liddell and Bayswater power plants and two development sites, to finance road, school and hospital projects across the state.
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