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6 Febuary 2007 - Origin Energy, the Australian power retailer, said it was in talks with AGL over a possible A$13bn (US$10bn) merger proposed by its larger rival.
AGL, Australia's biggest electricity and gas retailer, last month confirmed it had approached its nearest rival with an all-stock merger offer, with no premium attached. A merger would give Origin - which owns a controlling stake in Contact, New Zealand's dominant power utility - access to AGL's extensive customer base, while AGL would gain access to the gas reserves of Australia's biggest coal seam gas producer.
But the tie-up is expected to raise significant competition concerns, with some analysts suggesting that more than A$1bn of customer contracts would need to be divested for the merger to gain approval from Australia's tough competition regulator. AGL has said it plans to address such concerns by spinning off a new national retailer with gas and electricity customers. It may also spin off some power plants into a separately listed company.
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