Tauranga-based company Trustpower has agreed terms with Mercury for the conditional sale of its gas, telecommunications and retail electricity supply business.
Both companies confirmed the acquisition, worth $441 million, earlier this week, with the transaction conditional on matters including Commerce Commission clearance, completion of the proposed restructure of Tauranga Energy Consumer Trust and Trustpower shareholder approval.
The deal excludes the supply of electricity to commercial and industrial customers.
News of the sale follows a strategic review from Trustpower to test market interest in its retail business, and Trustpower chairman Paul Ridley-Smith says there were several interested parties in the acquisition of the retail business.
'We are pleased that our business will stay in local hands, with a future owner committed to retaining Trustpower's Tauranga and Oamaru offices for the foreseeable future,” says Paul.
'Mercury clearly understands the business and the strategic value of a proven multi-product offering, quality customer base and opportunities for future growth.”
Mercury chief executive Vince Hawksworth says the acquisition will accelerate Mercury's retail strategy, which is centred on delivering the right product mix and value for customers.
'Mercury and Trustpower are two highly complementary organisations, and this agreement would see the best of both being brought together for our customers,” says Vince.
'We know customers value the convenience and ease of bundled services in their home and Trustpower has deep expertise in bundling products in a way that people clearly appreciate. We see this adding material value to our customers and Mercury.
'Bringing together the retail businesses of Mercury and Trustpower will also give us the scale to make meaningful investment in the underlying IT systems, driving greater innovation for our customers.”
Vince says the strength of Trustpower's retail offering was underpinned by a highly skilled and motivated team, with approximately 500 staff focused on retail, based in Tauranga and Oamaru.
'We see a huge amount of talent and capability across both organisations, each with a strong focus on delivering the best possible outcomes for customers. We're excited for how we can continue to build on this together,” he states.
Trustpower chief executive David Prentice says the opportunities for employees has been an important consideration in this process.
'The capability and performance of our people is what makes the difference for our customers, communities, and shareholders. The majority of employees will get the opportunity to transfer to Mercury and of the rest of the employees most will remain with the generation business,” David says.
Tauranga Energy Consumer Trust chairman Bill Holland says confirmation of the sale underscores the need for the changes to TECT and the importance of Trustees acting when they did in response to a possible sale and the impact to beneficiaries earlier this year.
'The confirmation reaffirms how crucial it was for Trustees to act when we did to ensure that the rebate was protected for our existing beneficiaries under a change of ownership,” says Bill.
'It's great to see Mercury's commitment to retaining the business in Tauranga for the foreseeable future, and we look forward to the continued contribution of the business locally.”