Brookfield Asset Management announced today that it has signed a deal with Danish multinational energy company Ørsted to acquire a 12.45% minority stake in four of Ørsted’s U.K. offshore wind farms for approximately $2.3 billion.
The four wind farms – Hornsea 1, Hornsea 2, Walney Extension, and Burbo Bank Extension – have a total combined capacity of 3.5 GW in energy output.
The deal marks the latest in a series of large-scale clean energy transactions for Brookfield, including the recent acquisitions of a majority stake in France-based renewable energy developer Neoen for $6.6 billion, and Duke Energy’s commercial renewables business for $2.8 billion, renewable energy developer Scout Clean Energy for $1 billion, and of Banks Renewables, one of the UK’s largest independent developers and operators of onshore wind farms for nearly $1 billion. Brookfield is pursuing this transaction through Brookfield Infrastructure Fund V, which focuses on closed-end infrastructure, managed by the firm’s Brookfield Renewable Partners.
Connor Teskey, CEO of Brookfield Renewable and president of Brookfield Asset Management, said:
“We are pleased to be partnering with Ørsted to invest in four high-quality assets that are critical to supplying the UK with renewable power and supporting the country’s decarbonization objectives. This is Brookfield’s first investment in UK offshore wind, which will continue to be a critical part of the energy mix and to support the growing demand we see for clean energy.”
Under the new agreement, Ørsted will retain a 37.55% ownership in the wind farms, and will continue to exercise a similar level of control and governanceGovernance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. More as before the transaction. Ørsted will also continue to oversee the operations and maintenance of the wind farms, according to the current service agreements. The agreement includes a call option, providing Ørsted with the ability to repurchase the assets from Brookfield between two and seven years after the closing of the transaction at a pre-agreed price.
According to Ørsted, the transaction forms part of its farm-down programme, under which it divests ownership shares of existing operating assets in order to redeploy capital for future value-creating projects.
Mads Nipper, Group President and CEO of Ørsted, said:
“We’re pleased to welcome Brookfield, a leading renewable energy investor with proven investment and operational expertise, as a partner in four UK offshore wind farms in one of Ørsted’s core strategic markets. Today’s transaction is an important milestone in the farm-down program as part of our business plan, supporting our significant re-investment in new assets.”