Mercury to acquire Tilt Renewables in NZ

Mercury will get wind farm operator Tilt Renewables’ New Zealand business under a nearly A$3 billion deal which also sees Tilt’s Australian business taken over by the AGL Energy backed Powering Australian Renewables (PowAR) fund.

Tilt Renewables operates about eight wind farms in Australia (four) and New Zealand including two near Palmerston North, another in Otago, and one in southern Taranaki.

Mercury says that with PowAr it has entered a Scheme Implementation Agreement (SIA) with Tilt Renewables and that PowAR will acquire all the shares of Tilt (including Mercury’s shares) for NZ$7.80 per share and Mercury will acquire all of Tilt’s New Zealand operations, including development options, for an enterprise valuation of about NZ$770 million.

“Mercury is excited to have partnered with PowAR to make this compelling offer for Tilt,” Mercury chief executive Vince Hawksworth says.

“Throughout this transaction, Mercury has worked to keep these New Zealand assets under New Zealand ownership.”

Hawksworth says completion of this transaction will position Mercury to make an even more significant contribution to New Zealand’s decarbonisation goals.

“Tilt’s New Zealand wind operations combined with our Turitea windfarm, which is currently under construction, would represent almost 5% of New Zealand’s total generation.”

Mercury invested in Tilt in 2018 and has a 19.9% stake in it, which Mercury will sell to fund the acquisition, worth NZ$585m and net debt of NZ$185m, and forecasted to lift Mercury’s earnings (EBITDAF) in FY2022 by $50m.

The acquired Tilt assets will increase Mercury’s total annual generation by more than 1100GWh and include several prospective development options.

Infratil Ltd, which owns 65.5% of Tilt, has entered a voting deed to vote its shares in favour of the scheme. Mercury notes it could take four months for final approvals to seal the Tilt deal.