Monday 21st June 2021
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Mercury NZ Limited has announced that it has entered into binding agreements with Trustpower Limited to acquire Trustpower’s retail business for NZ$441 million, payable in cash.
The transaction is conditional on several matters, including Commerce Commission clearance, completion of the proposed restructure of Tauranga Energy Consumer Trust (TECT) and Trustpower shareholder approval.
Trustpower’s retail business is a leading multi-product utilities retailer selling electricity, gas, fixed and wireless broadband and mobile phone services to approximately 231,000 customers nationwide. The combined business will have approximately 780,000 connections across both energy and telco services. Mercury has secured a commitment for a new bank facility sufficient to finance the acquisition.
The transaction is conditional on Mercury obtaining Commerce Commission clearance for the purchase of Trustpower’s retail business. Mercury will be working with the Commerce Commission to progress the application as efficiently as possible once filed.
In addition to requiring Trustpower shareholder approval, the transaction is also conditional on the proposed TECT restructure being completed. Independent of this transaction, the TECT trustees already have this restructure process underway, as they wish to ensure that all Trustpower’s local retail customers (as at 28 January 2021) will remain beneficiaries of the Trust following any sale of Trustpower’s retail business. Mercury’s offer is conditional on the restructure occurring to ensure that those Trustpower retail customers could continue as beneficiaries of the Trust. Further details of the TECT restructure can be found on TECT’s website. The timing for regulatory approvals depends on several factors, including the current workload of the regulator. Mercury anticipates that these conditions will be fulfilled and completion of the transaction will occur within CY2021.
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