April 26 (Bloomberg) -- Alinta Ltd. agreed to buy Australian Gas Light Co.'s energy transmission and management units for A$6.45 billion ($4.8 billion) in stock and assumed debt, ending a two-month hostile takeover battle.
Shareholders of Australian Gas, the nation's largest energy utility, will own 46 percent of Perth-based Alinta after the transaction, the companies said today. Australian Gas will retain its retailing, generation and natural gas production businesses and acquire 33 percent of Alinta's gas retailing unit.
Australian Gas Chief Executive Paul Anthony, based in Sydney, will focus on energy output and supply in competitive markets and a stake in a $3.5 billion Papua New Guinea gas project. Alinta Chief Executive Bob Browning obtains control of Australia's biggest gas pipeline and electricity networks business.
``Both companies get to pursue their respective strategies,'' said John Deniz, a utilities analyst at Aegis Equities Research Pty in Sydney. ``Alinta is looking for infrastructure assets where they can tie up the operating and maintenance rights and AGL is still pursuing upstream energy.''
The transaction involves Alinta paying Australian Gas shareholders A$2.5 billion in stock, giving up a A$367 million stake in its energy unit and canceling a A$1.74 billion shareholding in Australian Gas. Alinta will also assume A$1.85 billion in debt, the companies said today in a joint statement to the Australian Stock Exchange and on a conference call with reporters.
Australian Gas will acquire 33 percent of Alinta's gas retailing and power generation unit, to be renamed AlintaAGL, for A$367 million and the right to buy the remaining shares within five years.
Agility Unit
Alinta will hold Australian Gas's infrastructure assets and asset management business, known as Agility.
The agreement resolves competing takeover offers by the companies, offering rival plans to combine their businesses and then split energy retailing and generation from the regulated energy transmission and distribution businesses. Each company had rejected the other's takeover bid.
``We believe this is a significant step forward for our shareholders, the individual businesses and the industry,'' Anthony said in the statement.
The enlarged Alinta business will be 54 percent owned by Alinta's existing shareholders and 46 percent by Australian Gas shareholders.
``This transaction will catapult Alinta into the largest energy infrastructure utility and asset manager in the country, with the potential for strong organic growth,'' Alinta's Browning said in the statement.
