Australia's electricity giant rejects green takeover
February 21, 2022
Billionaire Mike Cannon-Brookes has failed in a bid to take over AGL Energy and speed up its move away from coal. The company is both Australia's biggest electricity provider and its biggest greenhouse gas polluter.
Australia's largest electricity generator, AGL Energy, has rejected an 8 billion Australian dollar (€5.1 billion, $5.8 billion) takeover bid by investors wanting to close the company's coal-fired power plants 15 years early.
The company said the unsolicited offer by tech billionaire Mike Cannon-Brookes and Canadian investment firm Brookfield "materially undervalues the company on a change of control basis and is not in the best interests of AGL Energy shareholders."
The announcement of the bid's failure led to a jump of 10% in AGL's share price on Monday.
What did the bid intend to achieve?
Cannon-Brookes, 42, the Australian founder of software company Atlassian, has long been an outspoken critic of the pro-coal stance of the Australian government and the energy industry's failure to come up with strategies to meet climate targets.
The bid would have pushed AGL toward decarbonization of its activities much more quickly, among other things by closing coal-fired power plants by 2030 rather than 2045 as currently planned.
He has said he will continue to negotiate with AGL's board following the rejection of his bid.
"We strongly believe it will result in lower bills for consumers, we can fund this transition ourselves and we can build out the replacement capacity," he said.
"We'll create far more jobs ... and obviously the emissions are far lower," he added. "AGL is the largest emitter in the country; it represents over 8% of Australia's emissions."
Following the news of his bid's failure, Atlassian shares dropped 2% on Monday.
Cannon-Brookes' assertion on AGL's environmental impact is backed by data from Australia's Clean Energy Regulator, which has said AGL is the nation's largest greenhouse gas polluter.
Why does Australia refuse to give up coal? Climate change scientist Ian Lowe speaks to DW
What is Australia's stance on coal?
Currently, 60% of the country's electricity comes from coal, making it one of the highest carbon-emitting nations per capita. The nation is also one of the world's biggest exporters of both coal and gas.
Australia's conservative Prime Minister Scott Morrison has proved hesitant in coming up with emissions targets, despite widespread public support for climate action.
Morrison has also continued to pledge taxpayer money to fund new fossil fuel projects, even though experts say they are no longer financially viable as renewables become cheaper.
A rival to AGL, Origin Energy, recently decided to shut the 2.88 gigawatt Eraring plant in the Hunter region north of Sydney — Australia's largest coal-fired power plant — in 2025. It said the low cost of renewables meant the plant was no longer viable.