Sembcorp Industries (U96) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition provides strategic entry into Australia, a AAA-rated, structurally attractive market with strong growth and energy transition opportunities.

• Alinta's integrated platform offers a high-quality generation portfolio, coast-to-coast presence, and 3.4GW of installed and contracted generation assets.

• Access to a 10.4GW renewables and firming development pipeline, supporting expansion and diversification.

• The deal aligns with national climate targets and supports a brown-to-green strategy, rebalancing the portfolio toward developed OECD markets.

• Immediate earnings and returns accretion, with pro forma EPS and ROE increasing significantly post-acquisition.

Financial terms and conditions

• Equity consideration is approximately AUD 5.6 billion (S$4.8 billion); enterprise value is AUD 6.5 billion (S$5.6 billion), with an EV/EBITDA multiple of 6.6x LTM June 2025.

• Fully funded by a committed bridge facility of AUD 6.5 billion, with no equity raising required.

• Bridge facility to be refinanced via Alinta-level debt, syndicated loans, and corporate bonds.

• Alinta's average cost of debt is 5.5%-6% pre-tax; refinancing could yield 50-100bps savings.

• Fully paid in cash using bridge and working capital facilities.

Synergies and expected cost savings

• Integration expected to deliver immediate earnings accretion: pro forma EPS up 14% (SGD 0.65) for LTM June 2025 and 9% (SGD 0.63) for FY2024.

• ROE expected to rise to 22.5% and 22.3% in respective periods.

• Pro forma underlying EBITDA and net profit uplift of 44% and 28% for FY2024; 42% and 23% for LTM June 2025.

• Enhanced operational scale and geographical diversification expected to reduce earnings volatility.

• Robust cash generation from resilient operations to support debt servicing and deleveraging.