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Shell unit bids to acquire Australian power firm

Royal Dutch Shell PLC subsidiary Shell Energy Australia Pty. Ltd. entered into a scheme implementation deed to acquire Australian energy retailer ERM Power Limited for about A$617 million.

ERM Power is the second-largest energy retailer by load in Australia selling to commercial and industrial markets. The company also owns and operates two gas-fired generation plants.

"This acquisition aligns with Shell's global ambition to expand our integrated power business and builds on Shell Energy Australia's existing gas marketing and trading capability," Shell Australia's Country Chair Zoe Yujnovich said in an Aug. 22 news release.

The acquisition was already approved by Australia's Foreign Investment Review Board and the Australian Competition and Consumer Commission. However, the offer is still subject to court approval and ERM shareholder approval. The deal is expected to close before the end of 2019.

In March, Shell Japan Ltd. started selling retail electricity to business customers in Japan.

Shell also said in March that it plans to become the world's largest electricity firm by 2035. The company is looking to develop a clean power business that would supply customers, trade electricity and provide equipment on the same scale as its oil or gas operations.

Starting in 2020, the company aims to invest $1 billion to $2 billion per year in new energy technologies, including electricity.