Brookfield set to acquire majority stake in renewable giant Neoen in strategic shift

In a strategic move within the renewable energy sector, Brookfield Asset Management Inc. (NYSE: BAM, TSX: BAM), along with its institutional partners including Brookfield Renewable (NYSE: BEP, BEPC; TSX: BEP.UN, BEPC) and Temasek, through Brookfield Renewable Holdings, has initiated exclusive negotiations to acquire a 53.32% shareholding in Neoen (ISIN code: FR0011675362, Ticker: NEOEN). The parties agreed on a purchase price of 39.85 euros per share from Neoen’s primary stakeholders including Impala, the Fonds Stratégique de Participations (FSP), Cartusia, Xavier Barbaro, and other shareholders. The deal values 100% of 100% of Neoen at 6.1 billion euros.

Strategic Acquisition and Market Implications

Following this “block acquisition”, Brookfield Renewable Holdings plans to launch a mandatory cash tender offer for the remaining shares and OCEANEs of Neoen at the same acquisition price, ensuring a comprehensive takeover of the French-headquartered global renewable energy developer.

Connor Teskey, CEO of Renewable Power & Transition at Brookfield Asset Management, commented on the deal, stating, “Under Impala’s sponsorship, Neoen has built one of the world’s greatest renewable energy development platforms. We are excited to build on Brookfield’s expertise and access to capital to further accelerate Neoen’s growth while preserving its culture and identity.”

Endorsements from Existing Stakeholders

Impala’s founder and president, Jacques Veyrat, expressed satisfaction with the transition, noting Brookfield’s reputation as a responsible leader in renewable energy. Neoen’s Chairman and CEO, Xavier Barbaro, welcomed the new chapter for Neoen under Brookfield’s majority ownership, anticipating further growth and consolidation of its market position.

Transaction Details and Future Plans

Neoen boasts an impressive portfolio, including 8,000 megawatts of operational or under-construction assets across wind, solar, and storage, and a significant 20,000-megawatt development pipeline in key markets like Australia, France, and the Nordics. Brookfield, operating on five continents, sees this acquisition as an opportunity to scale Neoen’s high-quality asset portfolio amid rising demand for clean power, driven by sectors like AI and cloud computing.

The growth strategy is supported by Brookfield Global Transition Fund II, co-headed by Mark Carney and Connor Teskey, which focuses on investments facilitating the global shift to a net-zero economy. Brookfield Renewable, the largest investor in this fund, plans to commit up to 500 million euros to the acquisition.

Regulatory Steps and Finalization

The transaction is set to undergo customary regulatory reviews, including antitrust and foreign investments clearances, with approvals expected by Q4 2024. The tender offer is slated for launch in Q1 2025, following the completion of the block acquisition.

Neoen’s Board of Directors has unanimously supported the proposal, seeing it as a beneficial move for Neoen’s long-term growth. An ad hoc committee has been established to oversee the transaction’s fairness, further demonstrating the structured approach to this significant acquisition.

This acquisition not only reinforces Brookfield’s position in the global renewable energy market but also enhances Neoen’s capacity to meet growing global demands for sustainable energy solutions. It represents a pivotal development in the renewable energy sector, promising substantial impacts on global energy transition efforts.