New Zealand-based electricity generation company Mercury NZ has reached an agreement with Tauranga Electricity Consumer Trust (TECT) to acquire a 19.99% stake in Australian electricity firm Tilt Renewables.

TECT was formed under a Trust Deed in December 1993 as a result of the Tauranga Electric Power Board’s Establishment Plan.

For the acquisition, Mercury has agreed to pay TECT NZ$143m ($98m) or NZ$2.30 ($1.5) a share in cash. It will also have the six-month option to acquire the remaining 6.81% stake of Tilt held by TECT.

“The investment will allow Mercury to meaningfully participate in Australia’s accelerating transition to renewable energy sources.”

Mercury chief executive Fraser Whineray said that Tilt is an established business operating power plants in a growing renewables market.

Whineray said: “Tilt has established a robust portfolio of operating wind farms in both Australia and New Zealand, as well as consented renewable generation projects which it can bring to market when conditions are right.”

The acquisition is reported to be in line with Mercury’s strategy and will provide a platform for the company to explore new opportunities related to the electricity sector in Australia.

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Whineray added: “The investment will allow Mercury to meaningfully participate in Australia’s accelerating transition to renewable energy sources.

“Together with its other shareholders, we look forward to being part of Tilt’s contribution to growing renewable electricity generation.”

With the latest investment, Mercury will get further opportunities to deploy funds to capitalise on Tilt’s Australian position as projects are developed.

For Mercury shareholders, the deal is aligned with the company’s strategy for economic growth and follows the exploration of other opportunities in Australia’s electricity sector.