TORONTO and PARIS - Brookfield Asset Management (TSX:BAM) Inc. (NYSE: BAM, TSX: BAM), a leading global investor in renewable power, is set to acquire a 53.32% controlling interest in Neoen, a prominent renewable energy company based in France. The transaction is valued at 6.1 billion euros, reflecting a 26.9% premium over Neoen's last closing price.
The acquisition, conducted through Brookfield Renewable Holdings, a vehicle controlled by Brookfield, involves purchasing shares from major stakeholders including Impala, the Fonds Stratégique de Participations (FSP), and others at a price of 39.85 euros per share. This represents significant premiums over recent average prices.
Connor Teskey, CEO of Renewable Power & Transition at Brookfield Asset Management, expressed enthusiasm for leveraging Brookfield's expertise and capital to accelerate Neoen's growth. Jacques Veyrat, Impala's founder, also welcomed the transition, emphasizing Brookfield's reputation in the renewable energy market.
Neoen's Chairman and CEO, Xavier Barbaro, is optimistic about the company's next growth phase with Brookfield. Neoen's Board has unanimously welcomed the proposal and appointed Finexsi as an independent expert.
Following the acquisition, Brookfield intends to launch an all-cash tender offer for the remaining shares and convertible bonds of Neoen, with the possibility of a subsequent squeeze-out if conditions are met.
Neoen boasts a robust portfolio and pipeline, with over 8,000 megawatts in operation or under construction and a 20,000-megawatt development pipeline. Brookfield, with a substantial global presence and a nearly 34,000-megawatt capacity, views the investment as an opportunity to diversify into key renewables markets, particularly in light of the growing demand for clean power.
Brookfield Renewable, the largest investor in the Brookfield Global Transition Fund II, plans to invest up to 500 million euros from its available liquidity into the acquisition.
The transaction is subject to customary regulatory approvals, with expected completion by Q1 2025. This strategic move is based on a press release statement and is anticipated to strengthen Brookfield's position in the renewable energy sector while supporting Neoen's expansion.
InvestingPro Insights
As Brookfield Asset Management Inc. (NYSE: BAM) sets its sights on expanding its renewable energy footprint through the acquisition of a majority stake in Neoen, a glance at InvestingPro's real-time data and insights may offer a deeper understanding of the financial landscape surrounding this strategic move.
InvestingPro Data indicates a current Market Cap of $12.81 billion for Brookfield Asset Management, reflecting the company's significant presence in the market. Despite challenging market conditions, the company has managed to maintain a Gross Profit Margin of 58.34% over the last twelve months as of Q1 2024, illustrating its ability to efficiently manage costs relative to revenue.
Moreover, the Dividend Yield as of the latest data stands at 5.35%, combined with a history of raising its dividend for 9 consecutive years, as highlighted by InvestingPro Tips. This consistent return to shareholders showcases Brookfield's commitment to providing value, a factor that may reassure investors as the company delves deeper into the renewable sector with its latest acquisition.
InvestingPro Tips also reveal that the company has been trading at a high revenue valuation multiple, suggesting that the market has high expectations for Brookfield's future revenue growth. This optimism may be linked to strategic initiatives such as the Neoen acquisition, which is poised to bolster Brookfield's renewable offerings and potentially drive future revenue streams.
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