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Mergers, Acquisitions, Alliances and Synergies Case Study
Case Title:
Origin Energy’s Merger with Contact Energy: In Quest Of Greater Scale and Diversity
Publication Year : 2006
Authors: Supriyo Bose, Kumar Satyaki Ray
Industry: Energy
Region: Australia Newzeland
Case Code: MAA0103K
Teaching Note: Not Available
Structured Assignment: Not Available
OR
Abstract:
In February 2006, the energy industry in Australia witnessed a sea change when Origin Energy Ltd., the leading Australian energy company, decided to merge with Contact Energy Ltd., New Zealand’s second largest electricity generator. The cross-border merger created Australia’s largest integrated energy group with a market capitalisation of A$7 billion. The merger took place by way of dual-listed company structure and aimed to benefit both the shareholders by creating grater scale and diversity.
The case, while providing a broad overview of the two energy companies, offers scope to discuss the synergies of the merger and the probable payoffs.
Pedagogical Objectives:
- To understand the dynamics of a cross-border merger
- To discuss the synergies associated with a merger with specific reference to Ansoff’s Product/Market Mix
- To understand the dynamics of the energy sector in Australia and New Zealand
- To understand the dynamics of a Dual Listed Company (DLC) structure
- To discuss the convergence in the energy market and its impact on the global business environment.
Keywords : Mergers,Acquisitions,Alliances Case Study;Origin Energy Ltd; Contact Energy Ltd; Dual-listed company; Integrated Energy Group; Merger; Australia; New Zealand; Merchant plants; Contract plants; Co-generation; Synergies; National electricity market
