JSW Neo Energy to acquire O2 Power at enterprise value of $1.47 billion | Company Business News

New Delhi: JSW Neo Energy , a wholly-owned subsidiary of JSW Energy Ltd, is set to acquire renewable energy platform O2 Power at an enterprise value of $1.47 billion.

European alternative asset manager EQT and Singapore’s Temasek hold 51% and 49%, respectively, in O2 Power that has a capacity of 4.7 GW renewable energy. They both will exit the company, founded by former ReNew Power executives Parag Sharma, Peeyush Mohit, and Rakesh Garg, after the transaction.

In a statement, JSW Energy said that the transaction entails acquisition of O2 Power Midco Holdings Pte. Ltd. and O2 Energy SG Pte. Ltd. and is subject to approval of the Competition Commission of India (CCI) and other customary approvals standard to a transaction of this size.

In a separate statement, Parag Sharma, CEO of O2 Power, said: “This marks the beginning of the next phase for O2 Power. We had started with the vision to build a RE platform with a strong portfolio, and have been successful in delivering the targets we had set out with.”

“We thank EQT and Temasek for being our strong support during this phase of inception and initial growth. We look forward to working with JSW Neo Energy for the next phase. In the days ahead, as we evolve, it will be our endeavour to continue building value for all our stakeholders, both external and internal, and ensure that we significantly contribute to India’s renewable energy goals,” he added.

In September, Mint reported that JSW is among the shortlisted bidders to buy O2 Power. The other bidders in the fray were New York-based alternative investment firm Stonepeak, I Squared Capital, and Macquarie Group.

Sharad Mahendra, joint managing director and CEO of JSW Energy, said: “We are thrilled to announce the acquisition of O2 Power’s 4.7 GW renewable energy platform which is JSW Energy’s largest acquisition since inception. This landmark acquisition strengthens our positioning as a leading player in India’s energy sector. These high-quality assets strengthen our operational footprint across key resource-rich states. It gives me a great joy to welcome the experienced management team and employees of O2 power to JSW Energy family.”

O2 Power has a total capacity of 4,696 MW, of which 2,259 MW will be operational by June 2025. Another 1,463 MW is currently under construction and about 974 MW is in the pipeline, and they are scheduled for commissioning by June 2027. The capacities are spread across seven states of India, it said.

This acquisition will help increase the JSW Neo Energy’s locked-in, or planned generation capacity by 23%, from the current 20,012 MW to 24,708 MW.

Pritesh Vinay, director (finance) and CFO of JSW Energy, noted that the acquisition is significantly value-accretive to the shareholders of JSW Energy.

“This is a very attractive acquisition – both from ‘Build vs Buy’ trade off as well as from a quality and value perspective when compared to all acquisitions in this space over recent times, and is consistent with our long track record of being prudent in capital allocation and focusing on high cash returns projects above our hurdle rate of mid-teen equity IRR (internal rate of return).”

PWC was the transaction advisor to JSW Neo, while Khaitan & Co and Herbert Smith were the legal advisors. KPMG carried out financial and tax due diligence and Wind Guard carried out the technical due diligence, the statement said.

Earlier this month, JSW Energy said in a regulatory filing that it has secured multiple renewable energy projects in the commercial and industrial (C&I) power market, achieving a total locked-in generation capacity of 20 GW.

JSW Energy began commercial operations in 2000, with the commissioning of its first 2×130 MW thermal power plants at Vijayanagar, Karnataka. Since then, the company has enhanced its power generation capacity from 260 MW to 7,740 MW, with a portfolio of 3,508MW thermal power, 2,166 MW wind, 1,391 MW hydroelectric, and 675 MW solar power. It is currently constructing various power projects to the tune of 2.1 GW, with a vision to commission a total power generation capacity of 20 GW before 2030.