Brookfield Renewable has agreed with Duke Energy to acquire its unregulated utility scale commercial renewables business at an enterprise value of approximately $2.8 billion, including non-controlling tax equity interests and the assumption of debt.
The sale agreement for Duke Renewables includes 5,900MW of operating and under construction wind, utility scale solar and storage assets, and a 6,100MW development pipeline.
Duke Energy's expected net proceeds from this transaction are approximately $1.1 billion, subject to certain customary adjustments.
The primary operations of the business will remain in Charlotte, North Carolina and the Duke Energy employees will transition over to Brookfield to maintain business continuity for its operations and customers.
"With this acquisition, we are adding a scale operating renewable platform with a full suite of in-house capabilities and a proven management team experienced in operations and development," said Connor Teskey, chief executive of Brookfield Renewable. "We are also adding to our pipeline of renewable development projects, solidifying our position as one of the largest renewable energy businesses in the US with almost 90,000MW of operating and development assets."
The sale is subject to satisfaction of customary closing conditions and is expected to close by the end of 2023.
Morgan Stanley & Co and Wells Fargo Securities are serving as financial advisors to Duke Energy for this transaction. Skadden, Arps, Slate, Meagher & Flom is serving as legal counsel to Duke Energy.
Alongside the acquisition Brookfield announced equity offerings for aggregate gross proceeds of $500 million on a bought deal basis by a syndicate of underwriters co-led by Scotiabank, BMO Capital Markets, TD Securities, CIBC Capital Markets, and RBC Capital Markets.
The offerings will consist of a mix of limited partnership units of Brookfield Renewable and class A exchangeable subordinate voting shares of Brookfield Renewable Corporation. The exact amounts of these shares and units will be determined by the underwriters and announced on June 13, 2023.
Additionally, one or more subsidiaries of Brookfield Reinsurance will purchase a total of $150 million worth of either limited partnership units or exchangeable shares.
Brookfield Renewable operates one of the world’s largest publicly traded, pure-play renewable power platforms. Its portfolio consists of hydroelectric, wind, utility-scale solar and storage facilities in North America, South America, Europe and Asia, and totals approximately 31,600MW of installed capacity and a development pipeline including approximately 131,900MW of renewable power assets.
In addition, Brookfield Renewable has 12 million metric tons per annum of carbon capture and storage, 2 million tons of recycled material, 4 million metric million British thermal units of renewable natural gas pipeline, a solar manufacturing facility capable of producing 5,000 MW of panels annually and 1 MMTPA green ammonia facility powered entirely by renewable energy.
In December (2022) Brookfield Renewable finalized its $1 billion acquisition of Scout Clean Energy, a national utility-scale renewable energy developer-owner-operator, from Quinbrook Infrastructure Partners assuming full control of Scout and all its assets.