Brookfield Asset Management to Buy Majority Stake in Mahindra Susten
Mahindra Group has initiated talks with Canadian investment giant Brookfield Asset Management to sell a majority stake in its clean energy portfolio firm Mahindra Susten in one of the most high-profile deals in the renewable energy segment in recent times.
If it fructifies, the deal would mark the second acquisition of a solar firm from a domestic conglomerate by Brookfield. Earlier, it had purchased Emami Power from the Kolkata based group. A term sheet has been signed recently between both the parties and due diligence has begun on the proposed deal. Rather than asset sales or minority stake deals, Brookfield Asset Management is more comfortable with majority transactions at the hold co level.
Earlier plans of selling around 600 MW of assets of Mahindra Susten to a suitable suitor are not being pursued actively for the time being. However, they may be re-visited later if required. Brookfield has edged ahead in the race for now.
The likes of NIIF (National Infrastructure Investment Fund), KKR and CPPIB had expressed interest in the assets of Mahindra Susten and these reports had pegged the deal valuation at around $500 million.
Mahindra Susten has a good quality, well-built platform and is an attractive target as it possesses all three capabilities i.e assets, EPC (engineering, procurement and construction) and O&M (operations and maintenance).
The Canadian investment firm has been focussing on the renewable energy segment in other jurisdictions and is keen to add capability in India, develop the Mahindra Susten platform and then take it global.