Firms advise on $3bn hydro deal

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Herbert Smith Freehills and King & Wood Mallesons have advised on the $3bn sale of Pacific Hyrdro to Chinese- government controlled company State Power Investment Corporation.

Pacific Hydro was put up for auction back in April by IFM Australia Infrastructure Fund, which controlled the company for more than a decade.  The deal marks the latest acquisition by a Chinese company that has seen a string of Australian investments snapped up, The Australian reported.

The sale comes just days after the federal government reversed its decision to ban wind turbine investment.

“KWM is honoured to have acted for SPIC in this landmark transaction – it is one of the biggest investments by a Chinese bidder into Australia ever and one of the few that has been able to successfully navigate a competitive bidding process,” said lead Australian partner Jonathan Grant.

“With significant experience advising Chinese bidders investing into Australia and vice versa, KWM was able to bring both an Australian and a Chinese perspective to the negotiations, and guide SPIC on how to successfully meet the complex web of regulatory requirements while delivering funding and execution certainty for the sellers.” 

King & Wood Mallesons used a cross border team to complete the transaction.

According to The Australian, the renewable energy sector is expected to attract further investment following the Paris agreement committing nations to dramatically decreasing their reliance on fossil fuels.

“SPIC is committed to maintaining the stability of ­Pacific Hydro’s current business and management team, as well as supporting expansion through the pipeline of development projects,” said chairman Wang Binghua of the deal, adding that the transaction would add diversity to the business.

Pacific Hydro was also advised by Credit Suisse, Bank of America and Merrill Lynch.  State Power Investment Corporation was advised by Santander Global Corporate Banking and King and Wood Mallesons.