SunLive – Mercury Acquires Trustpower’s Retail Business Today

0

Mercury NZ Limited’s acquisition of the retail business of Trustpower Limited for the final acquisition price of $467 million is now unconditional and is expected to close later today.

The acquisition will double Mercury’s total customer connections and accelerate entry into the telecommunications market.

Trustpower’s retail business sells electricity, gas, fixed and wireless broadband and mobile phone services, totaling around 416,000 connections. The combined business will have approximately 787,000 connections, creating New Zealand’s first multi-product utility retail business.

The final acquisition price of $467 million is comprised of an underlying purchase price of $426 million plus a working capital contribution of $41 million. This is an increase of $441 million from the previously announced price, which is explained by a higher contribution to working capital, mainly due to Trustpower retaining its accounts payable obligations.

Mercury Chief Executive Vince Hawksworth said the acquisition of Trustpower’s retail business will allow Mercury to accelerate its retail strategy, providing the right product mix and increased value for customers on a faster path.

“Moving from a dual utility provider to a true multi-product retailer adds material value to our customers in terms of convenience, profitability and delivering innovative and exciting products,” says Vince.

“Multi-commodity bundling is a market in which Trustpower has had great success and we know that nearly half of Mercury customers like the idea of ​​having a single utility provider.”

Mercury initially announced that it had entered into binding agreements with Trustpower to acquire its retail business for NZ$441 million, payable in cash in June 2021. The transaction was conditional on several issues, including Commission clearance Commerce, Completion of Proposed Restructuring of Tauranga Energy Consumer Trust and Trustpower Shareholders Approval.

In an April survey of about 1,500 Mercury customers, 45% said they would find it somewhat or very attractive for a company to provide multiple utilities to their household.

Greater scale will also allow Mercury to invest in the underlying technology platform, enabling better services and an improved customer experience, Vince said.

“We want to deliver a best-in-class customer experience, including seamless interactions across multiple touchpoints, as we deliver new products and experiences.”

Mercury will also be able to take targeted action more broadly for customers and New Zealand, Vince said.

“As New Zealand transitions to a low-carbon economy, we want to ensure this change is fair to all consumers, including those who are struggling. We are acutely aware of the role we have to play as a major retailer and this is only growing in importance. »

He says Mercury and Trustpower customers will continue to receive the same high level of service they have experienced from both retail brands.

“Today is about welcoming approximately 570 new colleagues to Mercury, bringing us to approximately 1,400 employees nationwide. My leadership team is also growing, with the addition of Fiona Smith, Trustpower’s Managing Director of Client Operations, and Paul Bacon, Trustpower’s Managing Director of Markets.

“Our focus is quickly shifting to how we integrate the two retail businesses supported by our exceptional production assets, and how we can be innovative, responsive and streamlined in the way we operate.”

Share.

Comments are closed.