Sembcorp confirms talks to buy Australia’s Alinta Energy from Chow Tai Fook

[SINGAPORE] Sembcorp Industries on Monday (Dec 8) confirmed that it is in talks to buy Australia’s Alinta Energy, the country’s fourth biggest utilities company.

In a bourse filing, it stated that “it is currently considering potential acquisition opportunities which include Alinta Energy”.

The potential deal was recently reported by the Australian Financial Review (AFR) and The Australian, said the filing.

Sembcorp could sign a deal by this Thursday, according to the AFR on Sunday.

Alinta Energy is owned by Hong Kong’s Chow Tai Fook Enterprises, which bought the company for more than US$3.1 billion in 2017 from a group of lenders and investors, including TPG Capital.

Chow Tai Fook had been positioning Alinta for sale as early as 2022. The business had then been reportedly valued at about US$3 billion.

In addition to Chow Tai Fook, Hong Kong billionaire Henry Cheng’s family is also behind Hong Kong real estate player New World Development, which has been divesting assets.

Alinta has a combined maximum capacity of more than 2.8 GW, according to its website. It has four gas-fuelled power stations, a wind farm and a coal-fired power plant in Australia, as well as a gas-fuelled plant in New Zealand.

Its Loy Yang B brown coal-fired power plant in Victoria generates about 1.2 GW, which is about a fifth of the state’s power supply.

The energy player provides gas and electricity to more than 1.1 million homes and businesses in Australia and New Zealand, it said on its website.

In a separate Bloomberg report on Oct 22, Sembcorp Industries is said to be in talks to buy a minority stake in the gas-fired business of Thai energy company B.Grimm Power.

Sembcorp may acquire a 25 per cent to 30 per cent stake for US$500 million to US$600 million, valuing B.Grimm at around US$2 billion, the report said.

Shares of Sembcorp rose 0.5 per cent to close S$0.03 higher at S$5.99 on Friday.