Following completion of the acquisition, AGL will provide energy products and services to over 1.4 million natural gas customers and 1.7 million electricity consumers on Australia's eastern seaboard. AGL will have approximately 30% of the energy accounts in the region.

As part of the deal, AGL has also agreed to acquire the Utilimode customer service business from United Energy in conjunction with a two a year contract to provide back office services to United Energy.

To fund the purchase, AGL will conduct a share placement of at least $325 million through investment bank UBS Warburg.

"In the board's view, this acquisition should prove to be a key step forward in positioning AGL for the future. It fills some important gaps in our portfolio of activities," said chairman of AGL, John Phillips.

"At present, the Australian energy market is undergoing significant consolidation. In that environment, ensuring that AGL has a balanced portfolio of businesses is critical to building a solid growth platform and ensuring stability of financial performance in the future."

According to analysts, Pulse Energy represents a failed venture for its current owners, who are Shell Australia (40%), United Energy (25%) Woodside Energy (10%) and Energy Partnership (25% - venture between Aquila and AMP).

Woodside told the market that after Pulse's repayment of external financing, the amount it will receive from the sale would not be "materially different" from the book value of those investments.

United Energy said it will receive $83 million for its 25% interest in Pulse Energy and its 50% interest in EdgeCap, while receiving an additional $38 million for Utilimode. It expects to record a one-off loss of $39 million after tax, primarily due to selling Utilimode for less than its written-down book value.