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Brookfield enters deal to buy France's Neoen for $6.6 billion

Illustration shows Brookfield Renewable logo

(Reuters) -Canada's Brookfield said on Thursday that together with Brookfield Renewable Partners and Singapore's Temasek Holdings it has entered into exclusive talks to buy a majority stake in French renewable power producer Neoen, valuing it at around 6.1 billion euros ($6.6 billion).

The deal marks one of the biggest take private deals in Europe this year and comes amid strong investor interest in renewable energy assets.

Asset manager Brookfield said it is in discussions to acquire a 53.32% stake for 39.85 euros per share from Neoen's main shareholders, and then the remainder of the company at the same price, according to a joint statement by the companies.

The offer price was almost 27% higher than Neoen's last closing price. Shares of Neoen closed at 31.40 euros on Wednesday, giving the company a market cap of about 4.8 billion euros.

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"Brookfield's offer implies an equity value for 100% of the shares of 6.1 billion euros," Neoen said in a statement.

Brookfield and partners will buy a 42% stake in Neoen owned by French billionaire Jacques Veyrat's Impala SAS and the balance from other shareholders of Neoen, an independent producer of renewable energy operating in 16 countries.

Brookfield plans to make an all cash tender offer for the rest of Neoen at the same price and take it private once the majority stake purchase was completed, according to the statement.

"Our Board of Directors fully welcomes the transaction," said Xavier Barbaro, Neoen’s chairman and CEO, in the statement.

Investors are looking to acquire renewable energy assets amid a global push for energy transition.

In March, U.S investment firm KKR & Co launched a 2.8 billion euro takeover offer for German electricity and energy producer Encavis.

On Tuesday, Energy Capital Partners agreed to buy utility company Atlantica Sustainable Infrastructure Plc for about $2.56 billion in cash.

The amount of renewable energy capacity added globally in 2023 grew by 50% to almost 510 gigawatts (GW), according to the International Energy Agency, which expects further growth to 710 GW by 2028.

Brookfield sees the investment in Neoen as an opportunity to scale Neoen’s portfolio of diverse high quality assets in a context of accelerating clean power demand, according to the statement.

The deal also comes after Singapore state investment firm Temasek opened its Paris office in April. Temasek plans to invest S$20 billion to S$25 billion ($18.49 billion) in the EMEA region over the next five years, a spokesperson said during the Paris office opening.

Founded in 2008, Neoen is one of the world's biggest pure players in renewable energy with 8 gigawatts of solar power, wind power and storage projects in operation or under construction across France, Australia, Ireland, Finland and Sweden, according to its website.

It reported revenue of 524.4 million euros in 2023 and an adjusted net income of 80.4 million euros. It is targeting 10GW of capacity in operation or under construction by 2025.

($1 = 0.9263 euros)

($1 = 1.3523 Singapore dollars)

(Reporting by Gnaneshwar Rajan in Bengaluru, Olivier Sorgho in Gdansk, Yantoultra Ngui in Singapore and Dominique Patton in Paris; Editing by Varun H K, Stephen Coates, Michael Perry and Susan Fenton)