AGL has made a preliminary approach about a proposed $14 billion 50:50 merger between the two gas and electricity retailers.
The merger would create Australia’s largest gas and electricity supplier.
Anthony yesterday said AGL has many customers and is short on gas reserves, while Origin is the opposite, with fewer customers but more reserves.
“We would have an improved platform from which to pursue other domestic and international development and acquisition opportunities,” Anthony told analysts in a telephone briefing.
But the proposal has come under fire from the South Australian, Victorian and Queensland governments, which have called on the Australian Competition and Consumer Commission to have a merger banned on the grounds of market dominance.
Both companies are major players in Queensland’s coal seam methane industry, meaning a merger would give the new entity a near monopoly on the state’s gas market.
Subsequently, AGL might be forced to sell its 27.5% stake in fellow CSM-player Queensland Gas Company, and/or its half-stake in the Moranbah gas project – Australia’s largest CSM development.
If AGL decides to proceed, it will be the third time in nine months that it has made moves on an ASX-listed energy company.
Anthony told analysts AGL is considering spinning off a national energy retailer into a separately listed company to help meet the growing competition concerns.
“We are proposing a possible IPO route to maintain independence,” Anthony said.
He said AGL was yet to discuss the plan with Origin or the ACCC, who he wanted to have “a proper dialogue” with.
Origin has said it is still evaluating the proposal and has reiterated that it is yet to enter into formal discussions with AGL.
Meanwhile, the ACCC yesterday said it has begun market inquiries into Alinta’s proposed acquisition of Origin’s gas infrastructure assets.
The assets include Origin’s 17% interest in Envestra, 33.3% of the SEA Gas pipeline, its asset management business and other gas transmission and distribution assets.
Alinta has also indicated it may potentially seek to buy up to 100% of Envestra.
The ACCC said it will assess the proposed acquisition and is inviting comments from other parties in the energy and related industries.
