March 3, 2014 / 10:20 PM / in 4 years

Australian competition regulator blocks AGL's MacGen purchase

SYDNEY (Reuters) - Australia’s competition regulator on Tuesday blocked AGL Energy Ltd’s A$1.5 billion ($1.34 billion) plan to buy state-owned power company Macquarie Generation, saying the deal would have substantially reduced competition in the country’s most populous state.

AGL said it was reviewing the decision by the Australian Competition and Consumer Commission and would make a further statement in due course.

The New South Wales government last month agreed to sell MacGen to AGL, ruling out accepting lower rival offers from Brisbane-based ERM Power Ltd and Japan’s Marubeni Corp. It said it would pull the sale if AGL’s bid was rejected.

The regulator’s rejection also deals a blow to plans by Australian state and federal governments to kick off a series of privatizations of infrastructure assets this year to help pay for new road and rail projects.

($1 = 1.1194 Australian dollars)

Reporting by Lincoln Feast, editing by G Crosse

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