Shell moves to acquire ERM

Shell Australia has entered into an agreement to acquire ERM Power in a deal worth approximately $617 million.

Shell will purchase 100 per cent of ERM for a price of $2.465 per share, representative of a 38.4 per cent premium on the one month volume weighted average price of an ERM share of $1.78.

The deal still requires shareholder approval but has been endorsed by the ERM board.

ERM is an energy generation, sales and solution business that operates 622 MW of gas-fired power stations in Western Australia and Queensland, and is the second largest electricity provider to commercial business and industries in Australia by load.

Shell Australia Chair Zoe Yujnovich said the purchase was a significant step in the company’s power business.

“This acquisition aligns with Shell’s global ambition to expand our integrated power business and builds on Shell Energy Australia’s existing gas marketing and trading capability,” she said.

ERM CEO John Stretch said the deal with Shell was the right move for the company.

“Our strategy across electricity supply and demand aligns well with Shell’s global electrification and energy solutions ambitions,” he said.

“Shell’s considerable resources and reach would accelerate the opportunity and potential within ERM Power’s operations.”

Possible personnel changes at ERM remain unknown should the deal go through.

For more information visit the Shell website.

If you have company news you would like featured in Gas Today contact Managing Editor David Convery at dconvery@gs-press.com.au

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