Watchdog to examine MacGen bid

AGL Energy’s proposed bid for NSW power producer Macquarie Generation is to be closely examined by the competition watchdog, which has also started a review of a similar proposal by the smaller ERM Power.

AGL Energy’s proposed bid for NSW power producer Macquarie Generation is to be closely examined by the competition watchdog, which has also started a review of a similar proposal by the smaller ERM Power.

The Australian Competition and Consumer Commission (ACCC) advised of the informal reviews of the proposed deals on its website and called for comments from interested parties.

AGL and Queensland’s ERM have been shortlisted to take part in the final round of the NSW government’s privatisation process for MacGen, which produces more than one-quarter of the state’s electricity. China’s Shenhua Energy is also understood to be on the list.

AGL, which already owns the major Loy Yang A baseload station in Victoria, is widely expected to be able to bid for just one of MacGen’s two large power stations due to anti-trust issues.

It is more likely to be interested in the more modern and reliable Bayswater plant than the Liddell generator.

ERM, which has no baseload power production in the national electricity market that covers the southern and eastern states, will face fewer competition issues, but is expected to have a task putting together financing for a bid for MacGen, which has a book value of $2.1 billion.

For Shenhua, anti-trust issues are expected only if the ACCC takes a view that it is, in effect, a sister company of other Chinese state-owned ventures operating in the eastern states, such as Huaneng Group, which owns 50 per cent of Queensland generator OzGen with partner InterGen.

The ACCC has not said it is studying potential transactions involving Shenhua, which would need Foreign Investment Review Board clearance for a takeover.

Related Articles