Brookfield plans to buy a majority stake in Neoen SA, aiming to boost growth in renewable energy
Brookfield is in exclusive negotiations to acquire a majority stake in Neoen SA, aiming to launch a takeover offer valuing the French renewable energy developer at approximately €6.1bn (US$6.6bn).
According to BNN Bloomberg, the Canadian asset manager plans to purchase a 53.3 percent stake in Neoen at €39.85 per share, which represents a 26.9 percent premium over Neoen’s last closing price in Paris.
Brookfield, along with Brookfield Renewable Partners and Singapore’s Temasek Holdings Pte, intends to buy the 42 percent stake owned by French billionaire Jacques Veyrat’s Impala SAS holding company. They will acquire the remaining shares from other Neoen shareholders.
After securing the stake, Brookfield plans to make an all-cash tender offer for the rest of the company at the same price, potentially occurring in the first quarter of next year, pending regulatory approvals. Neoen’s board has unanimously welcomed the proposed offer.
“Our plan is to use our capital to accelerate Neoen’s growth to meet the growing demand that we continue to see for green power,” said Connor Teskey, Brookfield’s CEO of power and transition.
Neoen shares, which were suspended in Paris on Thursday, had gained about 11 percent over the past year before the announcement, giving the company a market value of around €4.8bn. This acquisition would be one of the largest take-private transactions in Europe this year.
Listed clean-power developers have been attracting takeover interest following declines in their stock prices due to rising interest rates and equipment costs.
For example, KKR & Co. offered in March to acquire German renewable-power producer Encavis AG in a €2.8bn deal, and Energy Capital Partners and co-investors agreed to buy Atlantica Sustainable Infrastructure Plc for about $2.6bn earlier this week.
Founded in 2008 by Impala, Neoen has grown into one of the largest independent producers of renewable energy, combining wind, solar, and storage in more than a dozen countries.
The company has raised hundreds of millions of euros to fund its growth through a 2018 initial public offering and subsequent share sales. Recently, Neoen has considered selling a stake in its Australian unit to finance its expansion in the country.
This deal will allow Jacques Veyrat to cash in on his investment in Neoen. Veyrat, who created the company while commodity-trading house Louis Dreyfus, left the firm in 2011 to focus on Impala.
Impala owns stakes in various companies, including cosmetics group Augustinus Bader, green asset manager Eiffel Investment Group, and renewable startup Tag Energy.
Neoen boasts assets of eight gigawatts in operation or under construction and a substantial pipeline of projects. Brookfield, with nearly 34 gigawatts of generating capacity, sees this acquisition as a strategic move.
Almost half of Neoen’s assets are in Australia, where it has developed flagship energy storage projects like the Hornsdale Power Reserve and the Victorian Big Battery. Neoen also has a strong presence in France and Northern Europe.
“There’s for us and our shareholders the opportunity to really accelerate the growth of the business and of course keep it as profitable as it has always been,” stated Neoen CEO Xavier Barbaro.
Teskey emphasized that Brookfield views the deal as a long-term investment, saying, “We certainly would expect to hold a business like this at least toward the end of a 10-year timeframe.”
BNP Paribas SA and Societe Generale SA are serving as financial advisers to Brookfield. Bank of America Corp is advising Neoen, while Citigroup Inc. is the financial adviser for Impala.
