The competition watchdog has signed off on a private equity buyout of Australia's largest energy retailer - an important milestone for the $18.7 billion deal but not its only hurdle.
The Australian Competition and Consumer Commission announced Tuesday it would not stand in the way of Origin Energy's acquisition by private equity giants Brookfield and EIG Partners.
The Foreign Investment Review Board, the Offshore Petroleum Titles Administrator and other foreign investment approvals are still required and some shareholder opposition to the buyout has emerged by those who think the deal undervalues Origin.
The review was complicated because Brookfield also owns a 45.4 per cent stake in AusNet, the former ASX-listed Victorian energy transmission business, raising competition concerns about vertical integration in the electricity supply chain in that state.
ACCC chairwoman Gina Cass-Gottlieb indicated that while agency thought the deal could lessen competition, that was outweighed by the public benefits to Australia's renewable energy transition.
"The ACCC considers that the acquisition will likely result in an accelerated renewable roll-out of renewable energy generation, leading to a more rapid reduction in Australia's greenhouse gas emissions," Ms Cass-Gottlieb said.
Brookfield has pledged to invest between $20 billion and $30 billion by 2033 in renewable energy and storage should the deal to purchase Australia's fourth -biggest greenhouse gas emitter go through.
Ms Cass-Gottlieb said that the Brookfield Global Transition Fund was specifically established to focus on the transition to renewable energy and its decision to buy Origin was driven "by a strong imperative and commercial incentive to lower emissions quickly."
She said while the agency was concerned about a lessening of competition in Victoria's energy market, there were mitigating factors that would limit obvious or extreme discrimination by AusNet against Origin's rivals, such as the role of regulators.
