Australia

Feb 12, 2014

‘Another Coles and Woolies’: fears of electricity triopoly in MacGen takeover

AGL will buy Macquarie Generation for a bargain-basement price, raising fears of a lack of competition in an electricity market where prices are already heading skywards.

Paddy Manning

Crikey business editor

If the federal government is worried about electricity prices it should be looking at this: AGL has this morning confirmed it will buy one of the country’s largest electricity generator, the New South Wales government-owned Macquarie Generation, for the bargain-basement price of $1.5 billion — well below the book value of $2.1 billlion.

“MacGen” owns the Bayswater and Liddell coal-fired power stations in the Hunter Valley, with combined capacity of some 4800MW representing 28% of the state’s generation. The market broadly expected AGL to be the highest bidder — Marubeni and ERM are believed to have been the underbidders — and its shares ticked up on the announcement.

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