Abu Dhabi: Shareholders of Abu Dhabi National Energy Company – Taqa – on Wednesday voted in favour of the company’s proposed merger with Abu Dhabi Power Corporation (ADPower), with the transaction set to create one of the largest utilities company in the GCC.
Under the agreement, ADPower will transfer the majority of its water and electricity generation, transmission and distribution assets to Taqa, which is owned by ADQ, one of the largest holding companies in the region. With combined assets of Dh200 billion, the merger will also create a top 10 utility company within Europe, Middle East and Africa (EMEA).
The transaction is scheduled to be completed by the third quarter of this year, and will see Taqa having a majority stake in almost all power and water generation plants in the UAE.
“As ADQ seeks to harness and enhance the value and diversity of our investment portfolio to drive Abu Dhabi’s economic growth and prosperity, this transaction demonstrates what that means in highly visible and practical terms,” said Mohammad Hassan Al Suwaidi, chief executive officer of ADQ, vice chairman of ADPower and board member of TAQA,
“The energy and power sector remains core to Abu Dhabi’s economy, and is still one of its most strategically important and most potent as a generator of revenue and a multiplier of value. Measured by scale and scalability, technical expertise and earning ability, the new combined entity is a true regional utilities champion, and a powerhouse for Abu Dhabi’s future,” he added.
Under the deal, Taqa will also retain its existing stock market listing, making the combined entity one of the largest listed on the Abu Dhabi Securities Exchange.
“This is a transformational deal for Taqa. We have complementary domestic and strong international footprints in the UAE, EMEA and the Americas, and this move gives us the financial muscle and expertise to capture new opportunities in the future,” said Saeed Hamad Al Dhaheri, chief executive officer of Taqa.
“The larger company will benefit from its extensive network to capitalise on growing demand for power and water while also playing a key role in supporting the UAE’s transition to clean energy as part of the country’s Energy Strategy 2050,” he added, highlighting the merger’s long term strategic benefit for the country’s energy sector.
Once completed, the merger will also see Taqa generate recurring income with more than 85 per cent of its revenues coming from regulated and long term contracted businesses, which will also be supplemented by its oil and gas assets.
Taqa’s operational scale will also be significantly higher and will include more than 1 million customers in the UAE, an electricity network of 80,000km and a water pipeline of 20,000k, production of 320 billion gallons of water per year and an electricity generation capacity of 23 GW – enough to power 3.5 million homes.
“This transaction pools the considerable resources of Abu Dhabi’s utilities sector to create significant added value, profitable growth and financial stability, advancing our water and electricity ambitions in alignment with our nation’s progressive, long-term vision,” said Husain Thabet, chief executive office and managing director of ADPower, commenting on the merger.
“We are creating a powerful industry heavyweight, underpinned by a dynamic engine of growth that will continue to attract world-class talent, partnership and investment. Through deep collaboration and strategic execution, Taqa and ADPower will write a new chapter for our communities’ evolving water and electricity industry – and, in turn, for our nation – in the future.”