Sembcorp Industries Alinta Energy Acquisition Announcement

Summary

Sembcorp Industries held a briefing call to announce its proposed acquisition of Alinta Energy, a leading integrated energy company in Australia, for an enterprise value of AUD 6.5 billion. The transaction represents a strategic entry into the Australian market, providing immediate earnings accretion with 14% EPS increase on a pro forma basis. Alinta operates 3.4 GW of generation capacity across gas, coal and wind assets, serving 1.1 million retail customers, and possesses a substantial 10.4 GW renewables development pipeline spanning wind, solar and storage technologies. The acquisition aligns with Sembcorp's energy transition strategy, offering access to Australia's AAA-rated market with clear decarbonization targets and stable regulatory framework. Management emphasized this is a portfolio acquisition to support energy transition, not a reversal to coal investments, with the brown cash flows funding green development. The deal will be fully funded through debt facilities without equity raising, and Sembcorp expressed confidence in maintaining dividend levels while managing leverage within investment-grade parameters. Completion is expected in first half 2026 subject to shareholder approval and regulatory clearances.

Key Points

• Sembcorp announced acquisition of 100% of Alinta Energy for AUD 5.6 billion equity consideration
• Transaction valued at EV of AUD 6.5 billion representing 6.6x EBITDA multiple
• Alinta is leading integrated energy company in Australia with 3.4 GW generation portfolio
• Acquisition provides strategic entry into AAA-rated Australian market with stable regulatory framework
• Alinta has substantial 10.4 GW renewables development pipeline across wind, solar and storage
• Transaction expected to be immediately earnings accretive with 14% EPS increase on pro forma basis
• Deal will be fully funded by bridge facility with no equity raising required
• Completion expected in first half 2026 subject to approvals and conditions
• Alinta serves 1.1 million retail customers across electricity and gas markets
• Portfolio includes Loy Yang B coal plant providing 20% of Victoria's energy demand

Action Items

• Dispatch circular and EGM notice targeted for mid-January 2026
• Schedule extraordinary general meeting for end of January 2026
• Obtain shareholder and regulatory approvals for transaction completion
• Refinance bridge facility through mix of Alinta-level debt and long-term funding
• Work with Alinta management to execute 10.4 GW renewables pipeline development
• Implement management retention and incentive plans aligned with business objectives

Decisions

• Approved acquisition of Alinta Energy for AUD 6.5 billion enterprise value
• Committed to maintain current dividend levels and payout ratio
• Will not pursue greenfield coal investments or standalone coal assets
• Updated climate targets to 0.26 tons CO2e per MWh by 2035 due to portfolio changes
• Retain existing Alinta management team led by Jeff Dimery as CEO
• Maintain Alinta as independent subsidiary with local operational management

Participants