Oil and gas group Shell has made an offer for the Australian electricity salesman ERM Power. The deal has a value of more than 377 million euros.
Shell offers 2,465 Australian dollars per share on ERM, a premium of 43 percent on the company’s most recent closing price on the stock market. ERM’s board and founder and major shareholder Trevor St. Baker support the bid. The completion of the transaction is expected at the end of the year.
ERM is active in the field of sales and production of electricity and the second largest player in that field in Australia. The energy company supplies both consumers and industrial customers.
Shell, which is already active on the Australian gas market, wants to become a more important player worldwide in the market for generating, buying and selling electricity. The acquisition of ERM fits in with that ambition, explains Shell Energy Australia’s Zoe Yujnovich.
An important factor at ERM is that profit margins have been under pressure in recent years. This is partly due to fierce competition, but also due to new regulations on the Australian energy market. St. Baker expects Shell to have sufficient resources to allow ERM to grow further in those circumstances.
