By Stuart Condie

SYDNEY--France's Neoen will sell some of its Australian generation and storage assets to real-estate investor HMC Capital in a deal smoothing Brookfield Asset Management's US$6.41 billion takeover of the renewable power producer.

HMC will pay Neoen 950 million Australian dollars, equivalent to about US$616 million, for 10 assets in Australia's Victoria state. Australia's competition regulator recently said it wanted the assets sold before it approved Brookfield's acquisition of Neoen.

The portfolio comprises two storage facilities, a solar farm, a wind farm and six development assets. Canada's Brookfield already owns the local electricity network operator and the regulator had worried that owning the assets would give it an incentive to delay connections to rival generation projects.

"While there are some regulatory protections to limit obvious and blatant conduct disadvantaging rivals, there is still a clear potential for anti-competitive tactics," the Australian Competition and Consumer Commission's Philip Williams said in October.

Announcing the deal on Thursday, HMC acknowledged that its acquisition was event-driven and highly opportunistic.

"Today is an exciting and significant step in our ambition to be a national champion of Australia's transition to a net-zero carbon economy by 2050. This is a marquee acquisition," said former Prime Minister Julia Gillard, who is chair of HMC's energy transition business.

In June, Brookfield agreed to buy a majority stake in Neoen as the first step toward a full acquisition.

The deal between Brookfield and some Neoen shareholders covers a 53.12% stake in the company, but the investor plans to launch a tender offer for the remaining shares after completion of the majority-stake acquisition.

With the deal, Brookfield aims to bolster exposure to renewables and battery-storage technology and to accelerate Neoen's portfolio expansion. Paris-based Neoen has a portfolio of solar and wind power plants and energy-storage facilities, with operations in France, Finland, Mexico and Australia.

Brookfield has failed twice in recent years to gain a major foothold in Australian renewables.

In 2022, Brookfield walked away from AGL Energy after its second bid in partnership with Australian billionaire Mike Cannon-Brookes was rejected by the company's board. In December 2023, Origin Energy shareholders voted against an US$11 billion takeover offer from a Brookfield-led consortium, also on the grounds of price.

HMC said it will pay A$750 million on completion in July 2025, with the remainder to follow in December. It said that the purchase price is lower than the replacement cost of the operating assets, which have a capacity of 652MW.

The portfolio will seed HMCs energy transition platform, the ASX-listed company said. It secured A$550 million in new senior debt to underwrite the acquisition.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

December 04, 2024 17:09 ET (22:09 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.