AGL announces acquisition of Powerdirect Australia

19 February 2007 – AGL Energy has announced the acquisition of Powerdirect Australia from the Queensland Government for A$1.2bn (US$0.944bn).

The acquisition delivers AGL an additional 473 000 residential, small-to-medium enterprise (SME), and industrial and commercial accounts. With a combined load exceeding 19 TWh, Powerdirect is 20 per cent larger than the Sun Retail business sold by the Queensland Government last year and adds significantly to AGL’s already impressive energy portfolio.

The acquisition of Powerdirect will deliver AGL four distinct businesses – a strong South-East Queensland retail franchise, a high growth national SME business, a large and diverse business servicing industrial and commercial customers as well as an established power generation business which includes biomass, building on AGL’s growing renewable energy generation portfolio.

AGL Managing Director Paul Anthony said: “AGL has successfully acquired and integrated more retail energy businesses than any other Australian retailer and has a detailed integration plan to undertake the transition of Powerdirect into private ownership.

“We will work closely with Ergon, Powerdirect’s existing management and transition service provider Energex to ensure a smooth transition and minimise any disruptions, maintaining current high service levels for customers. The integration of the Sun Gas business, acquired in February 2007, into AGL’s national retail energy platform is currently progressing well.”

AGL expects there will be significant competition among energy retailers following the commencement of full retail competition in the Queensland market from July 1. The company has undertaken considerable planning to develop strategies for customer retention and is confident of maintaining market share.

Mr Anthony added: “This Powerdirect acquisition cements AGL’s position as the pre-eminent retailer of choice in Australia and enhances our position as a truly integrated energy company of scale and financial strength.”