Stay informed with free updates
Simply sign up to the Renewable energy myFT Digest — delivered directly to your inbox.
A French entrepreneur is set to receive a €2.6bn windfall after entering talks to sell his stake in solar and wind power developer Neoen, in the latest potential takeover of a renewable energy company this year.
Canadian infrastructure giant Brookfield and partner Temasek, the Singapore investment fund, said on Thursday they were in exclusive talks to take over Neoen, in a deal valuing the French company at €6.1bn.
The bidders are in negotiations with big shareholders — including 42 per cent owner Impala, an investment group founded by businessman Jacques Veyrat — to buy a 53.32 per cent stake in Neoen at €39.85 a share, the companies said on Thursday. The offer represents a 26.9 per cent premium to Neoen’s closing price on Wednesday.
Brookfield and Temasek plan to subsequently buy out the remaining shareholders to take the company private — a proposal unanimously welcomed by Neoen’s board.
The deal hands a sizeable sum to entrepreneur Veyrat, 61, whose interests stretch from energy to hotels and cosmetics brands such as Liérac and Roger & Gallet and who has previously built up and sold a telecoms company.
Formerly the head of French crop merchant Louis Dreyfus, Veyrat went on to found Impala in 2011, and also negotiated the sale of electricity group Direct Energie to TotalEnergies for €1.9bn in 2018.
Brookfield’s ownership will help Neoen develop its portfolio, which currently comprises 8 gigawatts of wind, solar and battery projects up and running or under construction, as well as a further 20GW under development.
“We believe we can grow successfully at scale,” said Neoen’s chief executive Xavier Barbaro. “Of course, this will require additional capital. So the potential of the company will be fully unlocked with this change of shareholders.”
The deal underlines investor appetite for renewable energy assets at a time when companies in the sector are under pressure from high interest rates and inflation pushing up the cost of capital-intensive projects.
Such assets are in demand from industrial groups and fossil fuel operators, who are looking to branch into clean energy, as well as infrastructure investors. Recent deals in the sector have included KKR launching a €2.8bn takeover bid for Germany energy producer Encavis earlier this year.
Connor Teskey, head of renewable power at Brookfield, said he had not seen an overall slowdown in renewables development despite the rising costs of projects, as developers could pass costs on to corporate buyers with “zero impact on demand”.
“For the end-customer it’s still the cheapest from of electricity they can find,” he added. “Renewables have grown exponentially over the last five to seven years, first and foremost because their position as the cheapest form of electricity production has been solidified.”
Neoen was founded 16 years ago, growing rapidly with solar and wind projects from Portugal to Australia, and has also branched into battery storage, which helps big corporate clients in areas such as mining or industry as well as tech with their growing electricity needs.
“The vision was that [renewable energy] would become a big industry, that it would fly by itself without subsidies,” said Barbaro, who founded Neoen with Veyrat’s backing.
Brookfield is one of the world’s largest renewable developers with a pipeline of about 157GW, and is trying to boost its portfolio in part to meet growing demand for clean power from tech companies for data centres.
In May, it signed a deal with Microsoft under which the Seattle-based tech giant will back about 10.5GW of renewable electricity projects to be developed by Brookfield.
Neoen, which was listed in Paris in 2018 at a valuation of about €1.4bn, raised more capital a year ago, in a €750mn rights issue.
Veyrat declined to comment when contacted by the Financial Times.