Brookfield is in exclusive talks to acquire a majority stake in Neoen SA with a view to launch a takeover offer that would value the French renewable energy developer at about €6.1 billion (US$6.6 billion).

The Canadian asset manager is discussing buying a 53.3 per cent stake in Neoen at €39.85 per share, according to a statement on Thursday, confirming an earlier Bloomberg News report. The potential offer represents a 26.9 per cent premium to Neoen’s last closing price in Paris.

Brookfield, together with Brookfield Renewable Partners and Singapore’s Temasek Holdings Pte, plans to purchase the 42 per cent owned by French billionaire Jacques Veyrat’s Impala SAS holding company. It will acquire the remainder from some other Neoen’s shareholders.

Once it has completed the stake purchase, Brookfield intends to make an all-cash tender offer for the rest of the company at the same price — which could take place in the first quarter of next year pending regulatory approvals — and take it private. The board of Neoen unanimously welcomes the proposed offer.

Brookfield’s plan “is to use our capital to accelerate” Neoen’s growth “to meet the growing demand that we continue to see for green power,” said Connor Teskey, the firm’s chief executive officer power & transition, in an interview with Bloomberg.  

Neoen shares, which were suspended in Paris Thursday, had gained about 11 per cent in the past year before the announcement, giving the company a market value of about €4.8 billion. 

A deal would rank as one of the largest take-privates in Europe this year and would come at a time when listed clean-power developers have been drawing takeover interest after declines in their stock prices in the wake of rising interest rates and equipment costs.

KKR & Co. offered in March to acquire German renewable-power producer Encavis AG in a €2.8 billion deal. Energy Capital Partners and co-investors agreed to buy Atlantica Sustainable Infrastructure Plc for about $2.6 billion earlier this week.

Founded in 2008 by Impala, Neoen has grown into one of the largest independent producers of renewable energy, combining wind, solar and storage in more than a dozen countries, according to its website. The company has raised hundreds of millions of euros to fund its growth via a 2018 initial public offering and subsequent share sales. It’s been recently considering selling a stake in its Australian unit to fund its growth in the country.

The deal with Brookfield will allow Veyrat to cash in on his investment in the renewable firm, which was created when the French entrepreneur headed commodity-trading house Louis Dreyfus. He left the firm in 2011 to focus on his Impala holding, which owns large stakes in everything from cosmetics groups such as Augustinus Bader to green asset manager Eiffel Investment Group and renewable startup Tag Energy. 

Big portfolios

Neoen has assets of eight gigawatts in operation or under construction as well as a large pipeline of projects. Brookfield has almost 34 gigawatts of generating capacity. 

Almost half of Neoen’s assets are in Australia, where it has developed flagship energy storage projects such as the Hornsdale Power Reserve and the Victorian Big Battery. It also has a large presence in France and in Northern Europe.

“There’s for us and our shareholders the opportunity to really accelerate the growth of the business and of course keep it as profitable as it has always been,” Neoen CEO Xavier Barbaro said. 

Brookfield’s Teskey said he sees the deal as a long-term investment. 

“We certainly would expect to hold a business like this at least toward the end of a 10-year timeframe,” he said.  

BNP Paribas SA and Societe Generale SA are acting as financial advisers to Brookfield. Bank of America Corp is advising Neoen, while Citigroup Inc. is the financial adviser of Impala.