Firms: Allens Linklaters (State Grid International Development Limited); Minter Ellison (tax advisor to Singapore Power); Herbert Smith Freehills (Australian legal advisor to Singapore Power)
Deal: State Grid Corporation of China will take a majority stake in most of Singapore Power’s Australian electricity and gas assets
Area:M&A/Energy & resources
Value: Approximately $5 billion
Key players: For Allens Linklaters the matter was led by Linklaters partners Thomas Ng and Judie Ng Shortell, both based in Beijing, and for Allens by Anna Collyer (pictured), partner and head of Allens’ power & utilities sector, and partner Wendy Rae, both based in Melbourne. Minter Ellison’s Melbourne-based core team of tax specialists included: partners Mark Green, Alan Kenworthy, John Riley and Bastian Gasser, consultant Nicholas Rouse and special counsel Gary Choy
Deal significance: State Grid Corporation of China is the world’s biggest utility company. It has agreed to buy 19.99 per cent of Singapore Power’s listed SP AusNet for $824 million and 60 per cent of Singapore Power’s unlisted Jemena assets. SP Ausnet and Jemena are two of Australia's largest utilities, with total assets of approximately $10 billion and $8.9 billion respectively.
The purchase price for these unlisted SPI Australia assets has been kept confidential. The deal is subject to Foreign Investment Review Board approval and clearance from China’s National Development and Reform Commission. State Grid Corporation of China is a Chinese government-owned entity whose networks cover about 88 per cent of China and yield revenues of about US$300 billion.
Singapore Power will retain a 31.1 per cent interest in SP AusNet and a 40 per cent stake in Jemena, an unlisted company that owns electricity and gas distribution and transmission assets in Victoria, NSW, Queensland and the ACT. The 49 per cent of SP AusNet that is publicly listed will remain so. Allens partner Anna Collyer said: “The proposed investments by State Grid are two of the most significant power asset deals in Australia.
They reflect the strength of the Australian power sector, and in particular the attractiveness to investors of a transparent and stable regulatory regime. Investment of this nature benefits the industry and the Australian economy more broadly due to the capital and expertise that can be contributed by investors such as State Grid.”