Just Energy stock up 15 per cent, new merger ‘could boost the energy sector’
A deal that could boost the power sector is underway between Australian energy giant, Westpac, and energy startup, KPMG.
Key points:A deal could boost Westpac’s energy sectorKey points :Westpac is looking to expand its operations in Australia and boost its own energy salesThe KPMGS deal could also see the energy company expand into the UKKPMG is part of WestpacGroup, a holding company for Westpac.
The two companies signed a definitive agreement in August last year to develop a new joint venture with the Australian subsidiary of Australian-owned KPMGs, a unit of the global energy giant.
The KSM Group is also part of the group that owns energy trading company Australian Commodities Group, which operates through a company called Australian Commods Group.
Westpac and KPM GainsSignificant increases in the energy market are expected in coming years as demand for energy increases in Australia, especially in remote communities.
The Australian Government has already committed to increase its energy imports from domestic sources to around 40 per cent of the 2020 peak by 2030.
But demand is also expected to increase in coming decades, according to the US-based International Energy Agency.
“There is a significant increase in demand, which is not necessarily related to a shortage of fossil fuels, but rather, that is a consequence of the increase in the demand for renewable energy,” the IEA said.
It said this could lead to greater demand for renewables, particularly solar and wind energy.
WestPac is also expanding its operations into the US and UK, where it currently operates two branches.
Key points Westpac is eyeing expansion into the United States and UKThe Australian firm is also eyeing expansion of its energy salesThere are already more than 50 US and British branches of KPMs energy unit in the US, with more than 30 companies based in the UK.
WestPAC is one of the largest energy trading firms in the world, with about $US6.6 trillion ($7.6 billion) in assets under management.KPM Genss owns about 1.7 million US shares, with $US2.8 trillion ($3.1 billion) under management, and owns about 6 per cent in the Australian company.KSM Group also owns about 4 per cent shares in Westpac and the KPM Group.
The deal will be subject to regulatory approval.