Shell has bid to ramp up its interest in energy retail markets with a bid to buy major Australian energy supplier ERM Power.
ERM confirmed that it had entered into a scheme implementation deed with Shell Energy Australia, the oil and gas giant’s Australia-facing entity, which would see it acquire 100% of ERM’s share capital at a price of just under AU$2.45 per share.
That bid would value the firm at around AU$617 million (£338 million), representative of a 38% premium over its weighted average stock price.
That deal was today (22 August) unanimously approved by ERM’s directors, who recommended that the supplier’s shareholders vote in favour of the bid
Jon Stretch, chief executive at ERM Power, noted that the company had grown rapidly to become Australia’s second-largest electricity supplier to the country’s C&I customers, and that its supply strategy aligned well with Shell’s electrification and energy solutions drive.
His sentiments were echoed by Shell Australia’s country chair Zoe Yujnovich, who said the acquisition stood to build on the company’s gas marketing trading capability in the country.
“ERM will become our core power and energy solutions platform and this acquisition is a significant step forward in growing Shell’s integrated power business in Australia,” she said.
The deal comes just under 18 months after Shell completed the acquisition of UK-facing energy supplier First Utility, which it rebranded as Shell Energy earlier this year amidst a major clean energy drive.