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Aussie M&A picks up where it left off in 2021

  • AGL Energy rejects an $8 billion takeover offer from Canadian asset management giant Brookfield.
  • Perth-based mineral exploration company IGO has also reportedly won an auction to buy Glencore’s CSA copper mine.
  • 2021 was the “biggest year for global M&A ever” with Australia also a hive of dealmaking activity.

Australia’s dealmaking landscape continues to look solid in 2022 on the back of the busiest and biggest year for global M&A since records began in 1980.

Today, AGL Energy (ASX:AGL), the largest power company in Australia, rejected an unsolicited, preliminary, and non-binding takeover bid from software billionaire Mike Cannon-Brookes and Canadian asset management giant Brookfield (NYSE:BAM).

The $8 billion bid, which was a 4.6% premium to AGL’s closing Friday share price and a 20% premium to the average traded price over the past month, was not enough to sway the company. Brookfield has also promised to invest up to another $10 billion to replace the AGL’s coal-fired power stations by 2030 and said it could lead the target to net zero emissions by 2035, some 12 years earlier than AGL’s plan.

In a statement today (February 21), AGL said the board considers that tilt to materially undervalued the company on a change of control basis and is not in the best interests of AGL Energy shareholders.

Meanwhile, Perth-based mineral exploration company IGO (ASX:IGO) has reportedly won an auction to buy Glencore’s (LON:GLEN) CSA copper mine in western New South Wales. The auction had previously been battled out between IGO and New York Stock Exchange-listed Metals Acquisition Corp. (NYSE:MTAL).

While IGO is said to be the preferred bidder, the suitor is in the final negotiations around the terms of the deal for the mine, which produces about 50,000 tonnes of copper and is expected to be worth more than $1 billion.

In December 2021, IGO agreed to acquire nickel miner Western Areas (ASX:WSA) for $1.1 billion in a cash deal.

The recent deals are a continuation of the hive of M&A activity last year. As previously reported by Grafa, 2021 was the “biggest year for global M&A ever” with dealmaking to continue through 2022. It was also the biggest year for private equity (PE) deal activity since M&A records began in 1980, with PEs accounting for nearly one-fifth of all transactions globally.

HWL Ebsworth Partner Oliver Carrick previously told Grafa that the Aussie M&A market in 2022 should stay hand in glove with buoyant global capital markets and strong M&A activity world-wide. It appears this has so far been the case.

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