agl and alinta agree to merge, page-2

nice rise back to $19.15 I will probably hold into the next financial year and decide in July 2006 whether to sell. However, will review documents when they arrive.


Merge accretive for energy ops: AGL
26/04/2006 12:01:10 PM

Australian Gas Light Company Ltd (AGL) expects its deal with Alinta Ltd to be materially earnings per share (EPS) and dividends per share (DPS) accretive for the energy business compared to AGL's initial proposal.

The deal is also expected to be DPS accretive for AGL shareholders.

AGL chief executive Paul Anthony said the combination of AGL and Alinta's assets is an improvement on AGL's original demerger strategy and would help AGL to capture value across its energy supply chains.

"The deal is DPS accretive to AGL shareholders," Mr Anthony said.

"We have achieved an excellent price for the assets."

He also said that AGL planned to grow its assets by 40 per cent over the next four years by exploiting organic growth opportunities.

Earlier on Wednesday, the two companies signed a binding agreement to merge their respective infrastructure businesses.

AGL's current energy assets would be combined with a 33 per cent stake in Alinta's West Australian retail and co-generation business.

AGL will pay $367 million for the stake in the Alinta business and will have the right to acquire the remaining 67 per cent over a five year period.

Alinta expects around $50 million in synergies per year from its deal with AGL and expects job losses from the deal to be less than the initial forecast of 500 made in its original merger proposal.

"We are factoring in about $50 million on an annual basis in synergies," Alinta chief executive Bob Browning said.

"That would translate to some job losses but certainly less than 500."

Mr Browning said Alinta had not yet put a figure on the staff cuts.

Earlier on Wednesday, the two companies signed a binding agreement to merge their respective infrastructure businesses.

AGL's current energy assets would be combined with a 33 per cent stake in Alinta's West Australian retail and co-generation business.