Trustpower’s retail business sells electricity, gas, fixed and wireless broadband and mobile phone services to approximately 231,000 customers nationwide. Photo / NZME
Power producer and retailer Mercury NZ has announced that it will buy out Trustpower’s retail operations for $ 441 million once it meets several conditions, including approval from the Trade Commission.
The two companies have reached a binding agreement which is also conditional on the restructuring of Tauranga Energy Consumer Trust (TECT) and the approval of the shareholders of Trustpower.
Trustpower’s retail business sells electricity, gas, fixed and wireless broadband and mobile phone services to approximately 231,000 customers nationwide.
Together, the companies would have about 780,000 connections across energy and telecommunications services.
In a statement, Mercury chief executive Vince Hawksworth said the acquisition would accelerate Mercury’s retail strategy, which is focused on delivering the right mix of products and the right value for customers.
âMercury and Trustpower are two very complementary organizations, and this agreement would see the best of both come together for our customers,â he said.
âWe know customers value the convenience and ease of bundled home services and Trustpower has deep expertise in bundling products in a way people clearly appreciate. We see this adding material value to our customers and to Mercury.
âBringing together the retail operations of Mercury and Trustpower will also give us the ability to make significant investments in the underlying IT systems, thereby fostering greater innovation for our customers. “
Hawksworth said the strength of Trustpower’s retail offering is backed by a skilled and motivated team, with around 500 retail-focused employees based in Tauranga and Åamaru.
âWe see a tremendous amount of talent and capability in both organizations, each with a strong focus on delivering the best possible results for clients. We are excited to know how we can continue to build on this together.
âCustomers will continue to enjoy all of the great service and support they have today with Trustpower and Mercury and we look forward to unlocking even more benefits and products for them over time. “
Trustpower is 51% owned by infrastructure investor Infratil.
In a statement, Infratil said it supports the sale and intends to vote in favor of the deal at Trustpower’s annual shareholders meeting in September.
The two companies will not be fully integrated until their IT systems allow for a better customer experience.
Mercury has secured a commitment for a new bank facility sufficient to fund the acquisition.
The transaction is conditional on Mercury obtaining authorization from the Commerce Commission to purchase the retail operations of Trustpower. Mercury will work with the Commerce Commission to move the request forward as efficiently as possible once filed.
The transaction is also conditional on the completion of the proposed restructuring of TECT and shareholder approval. Local retail customers will remain the beneficiaries of the trust after any sale.
The timing of regulatory approvals depends on several factors, including the current workload of the regulator. Mercury expects that these conditions will be met and that the transaction will be finalized by the end of the year.
TECT chairman, which owns a stake in Trustpower, Bill Holland said the confirmation of the sale underscored the need for changes to TECT and the importance of directors acting when they did.
âToday’s confirmation of a conditional sale of Trustpower’s retail operations reaffirms how crucial it was for the Trustees to act when we did so to ensure that the repayment was protected for our existing beneficiaries in the event of a loss. change of ownership.
“It’s great to see Mercury’s commitment to keeping the business in Tauranga for the foreseeable future, and we look forward to the continued contribution of the business at the local level.”