Brookfield has entered into exclusive negotiations with Impala, the Fonds Stratégique de Participations managed by ISALT, Cartusiai and Xavier Barbaro, and other shareholdersii to acquire approximately 53.32% of the outstanding shares of Neoen at a price of 39.85 euros per shareiii.
The acquisition price represents a 26.9% premium over the last closing price and premia of 40.3% and 43.5% over the 3- and 6-months volume-weighted average price respectivelyiv. Brookfield’s offer implies an equity value for 100% of the shares of 6.1 billion euros.
Subject to closing of the block acquisition, Brookfield would file an all-cash mandatory tender offer for all of the remaining shares and outstanding convertible bonds (“OCEANEs”) in Neoen with the intention of implementing a squeeze out.
The Neoen Board of Directors has unanimously welcomed Brookfield’s proposal and has appointed Finexsi as independent expert for the Board of Directors of Neoen.
Brookfield’s intention is to accelerate Neoen’s development and strengthen its position as a global leader in renewable energy.
Brookfield, together with its institutional partners including Brookfield Renewable and Temasek, through a special purpose vehicle exclusively controlled by Brookfield (“Brookfield Renewable Holdings”)v, has entered into exclusive negotiations to purchase a 53.32% shareholding in Neoen, a leading global renewable energy developer headquartered in France, from Impala, the Fonds Stratégique de Participations (FSP), Cartusia and Xavier Barbaro, and other shareholdersvii at a price per shareviii of 39.85 euros (the “block acquisition”).
Following the block acquisition, Brookfield Renewable Holdings would file a mandatory cash tender offer for the remaining shares and OCEANEs in Neoen (the “tender offer”) at a price of 39.85 euros per share and at a price per OCEANEs issued in 2020 (“OCEANEs 2020”) and 2022 (“OCEANEs 2022”) in line with the offer price for the shares and the terms of each OCEANEix.
Connor Teskey, CEO, Renewable Power & Transition at Brookfield Asset Management, said: “Under Impala's sponsorship, Neoen has built one of the world’s greatest renewable energy development platforms. We are excited to build on Brookfield’s expertise, track-record and access to capital to further accelerate Neoen’s growth while preserving its culture and identity. Acquiring Neoen further strengthens Brookfield’s global scale, while diversifying into key renewables markets and adding expertise in battery storage technology. We look forward to partnering with management to scale-up the business to meet the growing demand we are seeing for clean power.”
Jacques Veyrat, founder and president at Impala said: “Impala is delighted to sell the control of Neoen to Brookfield, a responsible actor and world leader in the renewable energy market. Impala created Neoen 15 years ago and have since then supported every stage of its development in France and then internationally, with outstanding success in Australia. With the financial backing of this new shareholder and the talent of Xavier Barbaro and his teams, Neoen will be able to continue its growth trajectory.”
Xavier Barbaro, Neoen’s Chairman and Chief Executive Officer, said: “After 15 years of successful and profitable growth with Impala as our key shareholder, we are thrilled to open a new chapter in Neoen’s history, with the arrival of Brookfield as our new majority shareholder. We look forward to developing a strong relation with Brookfield that will take Neoen to the next phase of its growth story, further consolidating its leadership position as an independent producer of renewable energy, and one of the most dynamic globally. Our Board of Directors fully welcomes the transaction and sees Brookfield as a partner of choice to preserve the structure and identity of Neoen in the best interests of its employees and its stakeholders.”
Nicolas Dubourg, Managing Director of the FSP and Chairman of ISALT, said: “We are extremely proud of the way Neoen has developed since the IPO. Driven by a relentless focus on profitable growth, operational discipline and open mindset, and fully focused on renewable energies, Neoen is a best-in-class company in its field. The FSP, whose strategy is to remain committed to financing the energy transition, has been at Neoen’s side since the IPO in 2018, and along the capital raises to fund the growth of its installed capacity thereafter. The proposed operation is a demonstration of how long-term investment in innovating French companies run by talented and experienced managers, with the aim to creating international leaders, can generate meaningful impact on a global scale.”
Transaction rationale
Neoen is a leading global renewables developer with an 8,000 megawatt high-quality portfolio of wind, solar and storage assets in operation or under construction alongside a significant 20,000 megawatts advanced pipeline of development projects, located in strategic markets, particularly in Australia, France and the Nordics. Neoen has significant expertise in battery storage technology, which will become an increasingly important part of the energy mix going forward. Neoen’s best-in-class capabilities include an experienced management team with in-house development, financing and operational capabilities and a track record of successfully delivering more than 1,000 megawatts of renewable capacity on an annual basis in attractive global markets.
Operating across five continents and managing a diverse portfolio of hydro, wind, solar, distributed energy and sustainable solutions assets, Brookfield is one of the world’s largest investors in renewable power and transition assets, with almost 34,000 megawatts of generating capacity and a development pipeline of approximately 157,000 megawatts. Brookfield has been active in France since 2015 with over 23 billion euros (US$25 billion) invested, across 15 different investments.
Brookfield sees the investment in Neoen as an opportunity to scale Neoen’s portfolio of diverse high-quality assets in a context of accelerating clean power demand. Brookfield is well positioned to support and accelerate Neoen’s high quality development pipeline thanks to its access to capital and in-depth industry knowledge. The growth of AI and cloud computing continues to drive higher demand for renewable sources of power, as typified by Brookfield’s recent agreement to supply Microsoft with over 10,500 megawatts of renewable power, the world’s largest such power supply deal.
Brookfield is pursuing the transaction through the Brookfield Global Transition Fund II which is Brookfield’s flagship vehicle for investing in and facilitating the global transition to a net-zero economy, co-headed by Mark Carney and Connor Teskey. This fund aims to deliver strong risk-adjusted financial returns for investors and meaningful decarbonization impact.
Brookfield Renewable, the largest investor in the Brookfield Global Transition Fund II, expects to invest up to 500 million euros (US$540 million) in the acquisition, which will be funded through available liquidity.
Key Transaction Terms
Definitive agreements for the block acquisition would be entered into after information and consultation with employee representative bodies. The transaction would be subject to customary regulatory approvals including antitrust and foreign investments clearancesx.
It is expected that the regulatory approvals would be obtained by Q4 2024 and that the tender offer would be launched in Q1 2025.
Offer unanimously welcomed by Neoen’s Board of Directors
The Board of Directors of Neoen, in a meeting on May 29, 2024, unanimously welcomed the proposed transaction without prejudice to the reasoned opinion to be issued by the Board following the submission of the report of the independent expert. The Board views Brookfield’s proposal as an opportunity to enhance Neoen’s development and growth over the long term.
To that end, the Board has established an ad hoc committee comprised of Mr. Bertrand Dumazyxi (independent board member and Chairman of the ad hoc committee), Mrs. Helen Lee Bouygues (independent board member and Lead Director) and Mr. Christophe Gégoutxii (independent board member) to monitor and facilitate the work of the independent expert, and to prepare a reasoned opinion on the merits of the tender offer and its consequences for Neoen, its shareholders and its employees. Following the recommendation of the ad hoc committee, the Board has appointed Finexsi as an independent expert pursuant to article 261-1 I and II of the Autorité des Marchés Financiers (“AMF”) general regulations to prepare a report as to the fairness of the financial terms of the tender offer.
Tender Offer
Following the completion of the block acquisition, Brookfield Renewable Holdings would become the majority shareholder in Neoen, holding approximately 53.32% of the share capital of Neoen, and would file a mandatory simplified cash tender offer with the AMF for all of the remaining shares in Neoen and the OCEANEs issued by Neoen at the same price per share as the block acquisition of 39.85 euros per sharexiii and at a price per OCEANEs 2020 and OCEANEs 2022 in line with the offer price for the shares and the terms of each OCEANExiv.
Brookfield Renewable Holdings intends to request the squeeze out of Neoen’s shares and OCEANEs if the legal and regulatory conditions are met at the end of the tender offer. The tender offer is expected to be completed during Q1 2025. It is reminded that the shareholders of Neoen have the right to opt until June 5, 2024 for the payment of the 2024 dividend in shares (at a unit price of 0.15 euro per share) and that such shares would be targeted by the tender offer.
BNP Paribas and Société Générale are acting as financial advisors to Brookfield and Clifford Chance is acting as its legal advisor.
Bank of America is acting as exclusive financial advisor and Bredin Prat is acting as legal advisor to Neoen.
Gide Loyrette Nouel is acting as legal advisor to the ad hoc committee.
Citi and Bredin Prat are acting respectively as financial and legal advisors to Impala.
Perchet Rontchevsky is acting as legal advisor to FSP.
