The ACCC will not oppose the acquisition of Neoen SA by a consortium led by Brookfield Renewable Holdings SAS (Brookfield BidCo), subject to a court-enforceable undertaking to divest Neoen's existing Victorian renewable electricity generation and storage assets and its development projects in Victoria.

Brookfield Renewable has established Brookfield BidCo for the purposes of the proposed acquisition. Brookfield Renewable is a division of Brookfield Corporation (Brookfield), which is a global asset management business.

Brookfield has a controlling interest in AusNet, that owns and operates Victoria's monopoly electricity transmission network and parts of the electricity distribution network. AusNet also has two battery energy storage systems and a further two development projects in Victoria.

Neoen specialises in renewable energy projects. Neoen has 15 operating assets in Australia and a further 48 projects in varying stages of development.

The ACCC's investigation focused on competition in the Victorian markets for the supply of renewable generation, firming capacity and electricity storage services, and Frequency Control Ancillary Services and/or Very Fast Frequency Control Ancillary Services.

The ACCC was concerned that Brookfield, through its control of AusNet, would be able to operate the Victorian transmission network to favour its own generation and storage assets and/or hinder rival generators or storage assets.

The ACCC concluded that the acquisition of Neoen would increase Brookfield's incentives to engage in such conduct.

"The ACCC has long-standing competition concerns with cross-ownership of monopoly energy network assets and energy generators, due to the potential for the monopoly provider to discriminate against rivals and favour its own operations," ACCC Commissioner Dr Philip Williams said.

"The ACCC considers that, without the divestment, the acquisition would have increased Brookfield's incentives to delay or increase the cost of connections works on rival projects or operate the AusNet transmission network to benefit Brookfield's related assets," Dr Williams said.

"While there are some regulatory protections to limit obvious and blatant conduct disadvantaging rivals, there is still a clear potential for anti-competitive tactics."

"With these significant concerns in mind, the ACCC has accepted a court-enforceable undertaking from Brookfield to divest Neoen's operating assets and development projects in Victoria," Dr Williams said.

"The ACCC considers that this divestment will reduce Brookfield's incentives to engage in such conduct as a result of the transaction."

Brookfield will now be required to divest Neon's operational assets and six further development projects in Victoria. The operational assets are the Victorian Big Battery, Numurkah Solar Farm, Bulgana Wind Farm and Battery.

Neoen has six development projects in Victoria that will also be divested. The development projects are Navarre Green Power Hub Stage 1 and 2, Kentbruck Green Power Hub Stage 1 and 2, Kentbruck Storage, Moorabool Battery Energy Storage System (also known as Victorian Big Battery Stage 2), Loy Yang Wind, and Bulgana X.

More information can be found on the ACCC's website at Brookfield - Neoen.

Background

Brookfield is a Canadian global asset manager with approximately US$900 billion assets under management.

In Australia, Neoen has 15 operating generation and storage assets capable of generating ~1.8GW of electricity, and 48 projects in varying stages of development capable of generating ~10GW of electricity once operational.

Brookfield BidCo has been established for the purposes of the proposed acquisition. Brookfield BidCo is a wholly owned subsidiary of Bernabeu Master UK Holdings Limited. Bernabeu Master UK Holdings Limited is ultimately owned by Brookfield Asset Management ULC. Temasek is a member of the consortium.

Brookfield Infrastructure (through Brookfield Super-Core Infrastructure Partners), with a 45.4% interest, is the largest investor in AusNet. The balance is held by a number of unrelated parties. Brookfield actively manages AusNet. AusNet has two battery energy storage systems and a further two development projects in Victoria.