June 12, 2019 / 2:07 AM / a month ago

Australia's AGL Energy has no plans to break up Vocus

MELBOURNE, June 12 (Reuters) - AGL Energy has no plans to break up its takeover target, telecoms firm Vocus Group Ltd, but instead will aim to grow the combined businesses, AGL Chief Executive Brett Redman said on Wednesday.

AGL announced a A$3.02 billion ($2.1 billion) tilt for Vocus on Tuesday, sparking a sharp fall in AGL’s shares as investors questioned why Australia’s top power producer needed to buy a struggling company with a fibre optic network.

Redman said on Wednesday AGL saw Vocus giving it a leg up in being able to offer new energy and data-blended products, although in the long run there may be parts of the Vocus business that were “not mission critical” to that objective.

“At this point we haven’t said that there’s anything that we would expect to exit,” Redman told reporters on the sidelines of an energy conference in Melbourne.

“We’re not going into this with a mindset of break-up. We’re going into this with a mindset of growing and combining the businesses.”

AGL on Wednesday unveiled an offer to pay customers in South Australia, Victoria, New South Wales and Queensland states to team up their rooftop solar panels and batteries into a “virtual power plant” that AGL would coordinate to boost power supply into Australia’s strained grid at peak times.

Redman cited that product as an example of how AGL could put Vocus’s network and data centres to use.

“All these new products and services that are emerging can be done without owning a fibre optic network. But our ability to do them will be enhanced if we do,” he said.

AGL’s shares recouped some losses on Wednesday, climbing 1.8% and outperforming the broader market.

$1 = 1.4380 Australian dollars Reporting by Sonali Paul; Editing by Stephen Coates

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