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Sembcorp Industries has announced the acquisition of Australia-based Alinta Energy for an enterprise value of A$6.5 billion, marking one of its largest overseas expansions. The deal gives the Singapore-based group full ownership of a major integrated energy business serving about 1.1 million customers with 3.4 GW of operating capacity across gas, coal, wind and solar. The acquisition also provides access to a 10.4 GW development pipeline, including wind and hydro projects, and Alinta's key Loy Yang B power station in Victoria. Sembcorp said the transaction is expected to be immediately earnings-accretive and supports its Asia-Pacific growth and renewable energy strategy, following recent clean energy investments in India.
Sembcorp Industries announced earlier this week that its Australian subsidiaries will acquire Alinta Energy for an enterprise value of A$6.5 billion (USD 4.32 billion), representing one of the largest international expansions undertaken by the Singapore-headquartered group. The transaction gives the Temasek-backed power company full ownership of one of Australia's most prominent integrated energy businesses. Advertisement
Alinta Energy operates a diverse portfolio serving approximately 1.1 million customers while managing 3.4 GW of capacity across gas, coal, wind and solar assets. The sale marks a strategic shift for Chow Tai Fook Enterprises (CTFE), the investment arm of Hong Kong billionaire Henry Cheng, which purchased Alinta for A$4 billion in 2017. CTFE has recently been realigning its portfolio amid liquidity pressures linked to New World Development, the Cheng family's highly leveraged real estate conglomerate, where Henry Cheng serves as chairman.
Sembcorp stated that the acquisition would be executed through two of its Australian units via the purchase of operating entities Pioneer Sail Holdings and Latrobe Valley Power (Holdings). The company did not detail the ownership structure of the acquiring entities.
The deal provides Sembcorp with access to a 10.4 GW development pipeline that includes wind and hydro projects, as well as Alinta's largest operating asset, the Loy Yang B power station in Victoria. The 1,200 MW brown coal facility supplies around 20 per cent of the state's electricity, according to Alinta's disclosures.
Sembcorp recently confirmed that it had been assessing potential acquisition opportunities following media reports of negotiations with CTFE. The company expects the transaction to be immediately earnings-accretive, projecting a 9 per cent pro-forma increase in FY24 earnings per share and a 14 per cent rise for the 12 months ending June 2025.
The acquisition further strengthens Sembcorp's Asia-Pacific growth strategy, complementing its recent purchase of solar assets in India from ReNew Energy Global and wider regional capital deployment as part of its renewables-focused transition.
CTFE noted that during its eight-year ownership period, Alinta delivered EBITDA growth at a 13 per cent compound annual rate, outperforming the company's top three peers by 14 per cent. The retailer also expanded generation capacity by 74 per cent and added more than 700 jobs over the same period.
Source - Reuters
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