Renewable energy company Contact Energy has entered into a Scheme Implementation Agreement (SIA) to acquire 100% of electricity generation company Manawa Energy for NZ$1.86bn ($1.14bn).
Manawa owns and operates 25 hydropower schemes around New Zealand with a total capacity of 500MW, alongside more than 1,200MW of geographically diversified wind and solar developments.
According to Contact, the combination of the companies will result in a development pipeline of more than ten terawatt-hours.
The directors of Manawa have unanimously recommended that shareholders vote in favour of the deal. The company’s major shareholders are renewable energy companies Infratil and TECT Holdings, which control 77.9% and have reportedly committed to voting in favour.
Manawa shareholders are expected to meet before H1 2025, as this is when both companies are targeting the receipt of regulatory approvals. Approval is needed from the New Zealand Commerce Commission, the High Court, as well as Manawa shareholders.
Manawa chairman Deion Campbell said: “This is an attractive acquisition offer. The combination of our hydro schemes with Contact’s generation assets, including its baseload geothermal fleet, creates a unique generation portfolio with significant diversification benefits.”
Contact CEO Mike Fuge commented: “Our hydro assets are complementary, with different seasonal generation profiles. Access to this type of hedging adds resilience and support for New Zealand’s large energy users.”
Contact estimates cost synergies of around NZ$33–48m per annum on a 100% run-rate basis. The company also stated that the combined entity will be able to offer “larger volumes of fixed price electricity to the market”.
The deal comes amid growing electricity shortages in New Zealand after the country’s hydropower generation hit a decade low in August.
Power Technology’s parent company, GlobalData, has identified green hydrogen as a major opportunity in New Zealand’s power market for both domestic use as well as export purposes.
