AGL Challenges Regulator’s Decision on A$1.51 Billion Power DealJames Paton
AGL Energy Ltd. is challenging a regulator’s decision to block its A$1.51 billion ($1.37 billion) deal to acquire government-owned power plants in Australia’s most populous state.
AGL, Australia’s second-largest electricity retailer, is seeking Australian Competition Tribunal approval to buy Macquarie Generation in New South Wales, the Sydney-based company said today in a statement. AGL opted for the tribunal rather than a federal court hearing because the process is usually faster, the company said.
The New South Wales government earlier this month put on hold the sale of Macquarie Generation’s two coal-fired power plants after the nation’s antitrust regulator stopped AGL’s bid on concerns that it would reduce competition. Buying the power plants, which account for more than a quarter of electricity capacity in New South Wales, would have increased AGL’s share of the national market to 21 percent from 12 percent.
The Australian Competition & Consumer Commission’s “decision has significant implications for the future of the energy industry in this country and, in our view, can’t be left unchallenged,” AGL Managing Director Michael Fraser said in the statement.
The tribunal has three months to consider the application, and may extend the review by an additional three months, according to the statement.
The antitrust regulator acknowledged AGL’s challenge to its ruling in a posting on its website, saying it welcomed the opportunity for its concerns over competition to be considered by the tribunal.
ERM Power Ltd., Australia’s fourth-largest electricity retailer, remains “very interested” in buying Macquarie Generation after a first bid failed, Trevor St Baker, ERM’s founder and deputy chairman, said March 21 in an interview.
AGL’s offer was the only one that exceeded the assets’ value, New South Wales Treasurer Mike Baird said earlier this month.