CHANG, PISTILLI & SIMMONS and Clayton Utz advised the parties to APA Group’s purchase of Origin Energy’s network for $556.5 million.
CP&S advised APA and Clayton Utz lead partners Graham Taylor and Emma Covacevich advised Origin Energy.
Under the deal, APA is purchasing the Origin Energy Asset Management (OEAM) business, a 17 per cent stake in the listed gas distribution company Envestra Limited and a third of the South East Australia (SEA) Gas Pipeline.
Envestra is Australia’s largest natural gas distributor. SEA Gas operates the natural gas transmission pipeline system that transports natural gas from Port Campbell and Iona in Victoria to markets in South Australia and Victoria, supplying more than 50 per cent of Adelaide’s natural gas energy.
APA will also acquire a range of smaller complementary assets owned by OEAM such as natural gas vehicle stations, co-generation facilities and part of a services provider to the water industry.
OEAM provides management and operations services to Envestra.
The APA Group’s latest energy purchase comes soon after it bought Direct Link, one of two cables linking the NSW and Queensland electricity grids, and MurrayLink HQI Australia and SNC-Lavalin Investment Australia, the owners of a 180-kilometre high voltage cable connecting the Victorian and South Australian grids.
CP&S lead partner on the deal, Mark Pistilli, said they had been working on the transaction for about three months before it was announced on 4 April.
He said the “private treaty” deal involved some concentrated negotiations and a head of sale agreement that was 1,400 pages long.
“Private treaty deals are negotiated deals so they have an intense document negotiation period and sometimes quite an intense due diligence period, which this did,” he said.
“So effectively over the past few months we have been conducting a legal investigation into the target business and negotiating the sale arrangements, which ran to thousands of pages.”
As well as Pistilli, the firm’s team included corporate specialists Guy Miller, Andrew Henscher and Marcus Connor.
APA Group managing director Mick McCormack said the Origin Energy businesses and assets APA had acquired were its core business.
“This acquisition will increase our cashflow, which in turn enhances our ability to deliver on our strategy to increase distributions by at least CPI annually,” he said in a statement.
He said this now meant APA would have operations in every mainland state, with SEA Gas giving access to South Australian customers as well as helping achieve the company’s plan to develop an east coast gas grid.
“The Origin Energy Networks acquisition also underscores APA Group’s commitment to gas as a fuel of transition. Future gas supply is a matter of vital importance for Australia.”
The transaction is expected to be finalised in July.
APA Group has also expressed interest in buying Bass Link, which connects Tasmania to the mainland electricity grids, should it come up for sale.
At the end of last year, Bass Link’s owner National Grid Australia said it would like to sell the $780 million interconnector to focus more on electricity and gas businesses in the US and the UK.
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