Adani Green To Acquire SB Energy’s 5-GW India Renewable Power Portfolio

Adani Green Energy Ltd., majority owned by billionaire Gautam Adani, will acquire SB Energy Holdings Ltd., in a push for cleaner fuels to curb emissions.

The Adani Group company has signed a share purchase agreement to acquire a 100% interest—80% from Japan-based SoftBank Group Corp. and 20% Bharti Group—in SB Energy, according to an exchange filing. The transaction pegs the enterprise valuation of SB Energy India at about $3.5 billion.

The closing of the deal is subject to customary approvals and conditions.

Bloomberg, on May 16, was the first to report about Adani Green being in advanced talks to acquire SB Energy.

Reacting to the deal, shares of Adani Green rose 5%—the most since March 26, 2021—as of 9:45 a.m. on Wednesday. That’s the fourth straight session of gains, with the stock up 15% during this period.

Adani Green, with this acquisition, will achieve a total renewable capacity of 24.3 gigawatt and operating renewable capacity of 4.9GW. SB Energy India houses a total renewable portfolio of 4,954 megawatt spread across four states in the country.

The target portfolio consists of large-scale utility assets with 84% solar capacity (4,180MW), 9% wind-solar hybrid capacity (450MW) and 7% wind capacity (324MW), the filing said. The portfolio comprises 1,400MW operational solar power capacity and another 3,554MW is under construction.

All projects have 25-year power purchase agreements with sovereign rated counterparties such as Solar Energy Corporation of India, NTPC Ltd. and NHPC. The operating assets forming part of the portfolio are primarily solar park-based projects.

SB Energy Holding’s revenue from operations rose 48% in 2020-21, lower than the 56% growth witnessed in the previous year.

“This acquisition is another step towards the vision we stated in January 2020, wherein we laid out our plans to become the world’s largest solar player by 2025 and thereafter the world’s largest renewable company by 2030,” Gautam Adani, chairman of Adani Group, was quoted as saying in the filing. “We are well on our way to achieve our stated solar portfolio targets four years before the deadline we set for ourselves.”

Adani Green has plans to achieve 25GW of renewable power generation by 2025. That’s in line with India’s aim to increase its existing renewable energy capacity to 220GW by 2022 as it tackles one of the worst air pollution problems in the world.