Origin Energy's merger with Contact Energy : in quest of greater scale and diversity

Abstract

In February 2006, the energy industry in Australia witnessed a change when Origin Energy Limited, the Australian energy company, decided to merge with Contact Energy Limited, New Zealand's second largest electricity generator. The cross-border merger created Australia's largest integrated energy group with a market capitalisation of 7 billion Australian dollars. The merger took place by way of a dual-listed company structure and aimed to benefit both the shareholders by creating greater scale and diversity. The case, while providing a broad overview of the two energy companies, offers scope to discuss the synergies of the merger and the probable pay offs