Mergers, Acquisitions and Takeovers Case Study

Origin Energy’s Merger with Contact Energy: In Quest Of Greater Scale and Diversity

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Abstract:

In February 2006, the energy industry in Australia witnessed a sea change when Origin Energy Ltd., the leading Australian energy company, decided to merge with Contact Energy Ltd., New Zealand’s second largest electricity generator. The cross-border merger created Australia’s largest integrated energy group with a market capitalisation of A$7 billion. The merger took place by way of dual-listed company structure and aimed to benefit both the shareholders by creating grater scale and diversity.

The case, while providing a broad overview of the two energy companies, offers scope to discuss the synergies of the merger and the probable payoffs.

Pedagogical Objectives:

• To understand the dynamics of a cross-border merger
• To discuss the synergies associated with a merger with specific reference to Ansoff’s Product/Market Mix
• To understand the dynamics of the energy sector in Australia and New Zealand
• To understand the dynamics of a Dual Listed Company (DLC) structure
• To discuss the convergence in the energy market and its impact on the global business environment.

Keywords : Mergers,Acquisitions,Alliances Case Study;Origin Energy Ltd; Contact Energy Ltd; Dual-listed company; Integrated Energy Group; Merger; Australia; New Zealand; Merchant plants; Contract plants; Co-generation; Synergies; National electricity market

Contents : 
A Brief Company Profile
Expected Synergies From The Merger
Origin’s Generation Business
Consolidated Income Statement Of Origin
Dlc Structure Of Contactorigin