Brookfield signs agreement to buy France’s Neoen for $6.6 billion

Brookfield, a Canadian asset management firm, announced on Thursday that it is in exclusive talks, together with its subsidiary Brookfield Renewable Partners and Singapore’s sovereign wealth fund Temasek Holdings, to acquire a majority stake in Neoen, a French renewable power producer. The proposed deal values Neoen at approximately 6.1 billion euros ($6.6 billion).

This transaction marks one of the largest take-private deals in Europe this year and comes amidst strong investor interest in renewable energy assets.

According to a joint statement by the companies, Brookfield is in discussions to acquire a 53.32 per cent stake in Neoen for 39.85 euros per share from the company’s main shareholders, and subsequently, the remaining shares at the same price.

The offered price represents a premium of nearly 27 per cent over Neoen’s last closing price of 31.40 euros on Wednesday, which gave the company a market capitalization of around 4.8 billion euros.

“Brookfield’s offer implies an equity value for 100 per cent of the shares of 6.1 billion euros,” Neoen stated in the announcement.

Brookfield and its partners will purchase a 42 per cent stake in Neoen owned by French billionaire Jacques Veyrat’s Impala SAS and the remaining shares from other shareholders of Neoen, an independent renewable energy producer operating in 16 countries.

Once the majority stake purchase is completed, Brookfield plans to launch an all-cash tender offer for the remaining shares of Neoen at the same price and take the company private, as per the statement.

“Our Board of Directors fully welcomes the transaction,” said Xavier Barbaro, Neoen’s chairman and CEO, in the statement.

Investors are actively seeking to acquire renewable energy assets amid the global push for energy transition.

The renewable energy capacity added globally in 2023 grew by 50 per cent to almost 510 gigawatts (GW), according to the International Energy Agency, which expects further growth to 710 GW by 2028.

Brookfield sees the investment in Neoen as an opportunity to scale the company’s diverse portfolio of high-quality assets in the context of accelerating clean power demand, as stated in the announcement.

The deal also aligns with Singapore’s state investment firm Temasek’s recent expansion into the EMEA region, having opened its Paris office in April. Temasek plans to invest between S$20 billion to S$25 billion ($18.49 billion) in the region over the next five years.

Founded in 2008, Neoen is one of the world’s largest pure-play renewable energy companies, with 8 gigawatts of solar power, wind power, and storage projects in operation or under construction across France, Australia, Ireland, Finland, and Sweden, according to its website. In 2023, Neoen reported revenue of 524.4 million euros and an adjusted net income of 80.4 million euros. The company is targeting to have 10GW of capacity in operation or under construction by 2025.