Australian hydrogen promoter Spark accepts takeover bid

Australian power network investor Spark Infrastructure has advised shareholders to accept the takeover offer from a consortium of US and Canadian investors, as it plans to develop a 2,500MW renewable energy hub to power hydrogen production.

The takeover values Spark, which owns gas and power distribution networks, at A$5.2bn ($3.76bn) through the offer of A$2.95 per share. The consortium compromises the Ontario Teachers' Pension Plan Board, US private equity group Kohlberg Kravis Roberts and Canada's Public Sector Pension Investment Board.

Spark said its proposed Dinawan energy hub in New South Wales will be unaffected by the planned takeover. Dinawan is proposed to be built in two stages, starting with 1,000MW of solar and wind capacity at a cost of A$1.8bn and the A$2.45bn second stage to add a further 1,500MW of solar and wind capacity. The addition of hydrogen production is planned under the second stage, with details of capacity and the kind of electrolyser to use still under consideration.

Around two-thirds of east Australia's electricity comes from coal-fired power stations, around 30pc by renewable energy and the remainder by gas-fired plants.

The bid for Spark is one of several merger and acquisitions under way in Australia's energy sector. Australian fuel distributor and retailer Ampol this week launched a NZ$2bn ($1.37bn) takeover offer for New Zealand fuel retailer Z Energy. Australian independent Woodside Petroleum last week unveiled plans to merge with the petroleum arm of UK-Australian resources firm BHP. Australian independents Santos and Oil Search this month announced a A$21bn merger.

By Kevin Morrison