SENNA

Energy Retailer Buyout in Jeopardy as FIRB Delays Approval

SYDNEY - A $100 million deal for a Chinese government-backed renewables developer to acquire an Australian energy retailer is on the brink of collapse after the buyer failed to secure approval from the Foreign Investment Review Board (FIRB) despite 18 months of efforts.

ASX-listed TPC Consolidated, which owns the CovaU electricity and gas retail business, agreed to the buyout by Beijing Energy International Holding in March 2024. However, with FIRB yet to decide on the transaction, the companies now face an uncertain future.

"Despite multiple extensions, FIRB has still not made a determination on whether to allow the transaction to proceed," TPC Consolidated said in a statement. The company warned that the deal could "collapse" without the necessary regulatory approval.

The stalled buyout highlights the challenges foreign investors can face in navigating Australia's heightened scrutiny of cross-border M&A, especially in sensitive sectors like energy. Deals requiring FIRB approval have faced lengthy delays in recent years as the government weighs national interest concerns.

Beijing Energy, a state-owned renewables firm, had proposed to acquire TPC Consolidated for $1.05 per share, representing a 47% premium to the stock's trading price at the time. The transaction would have provided a lucrative exit for TPC's shareholders and given the Chinese buyer a foothold in Australia's competitive energy retail market.

However, industry sources say FIRB's protracted review process, now stretching over 18 months, has tested the patience of both parties. The delay comes amid broader political tensions between Australia and China, which have spilled over into the economic realm in recent years.

Analysts note that the fate of the TPC Consolidated deal could have broader implications for foreign investment appetite in Australia's energy sector. "Investors will be watching this case closely, as it could set a precedent for how FIRB approaches future Chinese acquisitions in sensitive industries," said one market observer.

Federal Treasurer Jim Chalmers declined to comment on the specifics of the TPC Consolidated case. However, he reiterated the government's commitment to ensuring foreign investment aligns with Australia's national interests.

With time running out, TPC Consolidated said it would continue working with Beijing Energy and FIRB to try to salvage the transaction. But the clock is ticking, and the company warned that the deal now hangs "on the brink of collapse" without a timely regulatory decision.