Acquisition of New South Wales
Energy Businesses
The leading integrated energy company
In December 2010, Origin announced that it had entered into agreements with the New South Wales Government to acquire the Integral Energy and Country Energy retail businesses and enter into the Eraring GenTrader arrangements for $3.1 billion.
The announcement made Origin the largest energy retailer in Australia, with access to one of the largest and most diverse portfolios of owned or contracted generation capacity. It also diversified the Company’s integration into fuel supply and secured Origin’s position as the leading Australian integrated energy company.
The acquisition has provided immediate benefits to shareholders, evident in the strong initial contributions to earnings and cash flow. It also provides a strong platform from which to further grow the business.
Origin believes this was the last major opportunity to participate in consolidation of the Australian retail energy market. It follows the Company’s acquisitions of retailers Sun Retail, Citipower, Powercor and Energy 21 over the past 12 years.
Benefits of the acquisition
Since completion of the acquisition, integration of the acquired retail businesses into Origin’s existing business has progressed well.
Origin is excited to be playing a much bigger part in the New South Wales energy market and since completion has spent time welcoming its new customers from Integral Energy and Country Energy. Customers now receive co-branded Origin and Integral Energy or Country Energy correspondence and bills, and Origin’s wide range of products and services are now being extended.
Origin remains committed to delivering a high standard of service for both new and existing customers throughout this period and will integrate customers onto its new SAP billing platform as transitional arrangements with Integral Energy and Country Energy conclude over the next few years.
The NSW businesses provided a four month contribution to Origin’s full year results for FY2011 and, during this time, performed in line with expectations, providing a strong initial contribution to earnings and cash flow.
In the coming year, Origin expects Underlying EBITDA to benefit from a full year contribution from the acquisition of the Integral Energy and Country Energy retail businesses, and a full year of the Eraring GenTrader arrangements.
In FY2011, Origin welcomed 1.5 million new customers
(1) Includes 2,800 MW from Eraring Power Station (which represents the total contract capacity upon completion of the current unit upgrades in 2012).
