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AGL Energy, Australia's biggest energy retailer, may transfer more than 1.5 million customers to a new company that may be sold in an initial share offer after a proposed merger with Origin Energy, says Merrill Lynch.
The new company might include 1.5 million customer accounts in Victoria and South Australia, as well as Sydney-based Origin's gas customers in Queensland, a Queensland electricity retail business, interests in Queensland coal seam gas production, as well as power plants, Merrill said in a report on Tuesday.
Paul Anthony, managing director of Sydney-based AGL, said the IPO plan would address concerns of the Australian Competition and Consumer Commission (ACCC).
The new company would include some retail customers and potentially power plants, or rights to build plants, and an electricity hedge book, he said.
"ACCC issues look manageable to us, with an IPO of certain assets looking the most likely outcome," Sydney-based Merrill Lynch analysts led by Matthew Spence said in the report.
Merrill estimates an AGL-Origin merger may create savings of A$1.2 billion ($1.35 billion), before the initial share offer.
Origin, majority shareholder in New Zealand's Contact Energy, on January 4 said it received an "indicative and preliminary" approach from AGL for a no-premium stock-based merger to create Australia's biggest energy supplier.
- BLOOMBERG
