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Macquarie's bid for GIB to be approved

Macquarie’s bid for GIB to be approved

(20 February 2017 – United Kingdom) The UK government is poised to approve Macquarie Bank's £2 billion (A$3.2 billion) bid for Green Investment Bank (GIB).

According to sources familiar with the long-running privatisation, British government officials have told Macquarie the deal will be approved in the coming days.

The Australian investment bank was chosen as the government's preferred bidder since late last year, however faced criticism from UK MPs. 

GIB was established five years ago by the current government to invest in green energy and infrastructure projects including wind farms, waste and bioenergy and offshore renewables.

Former Chancellor George Osborne decided to sell it off last year to pay down public debt. However, a group of British MPs have questioned the timing of the privatisation of GIB and Macquarie's suitability as an owner.

They argue the bank may sell off GIB's assets, close its Edinburgh head office or ignore some of the smaller, less-profitable green projects GIB has purchased under government ownership. 

Macquarie has been prevented from commenting on GIB due to a confidentiality clause but has highlighted its track record as a long-term investor in green energy projects. 

There has also been speculation GIB could be floated on the sharemarket instead of sold.

But these hopes are set to be dashed with Macquarie believed to be ironing out the final details of the transaction with GIB and the government's advisers, investment banks UBS and Bank of America Merrill Lynch.

Macquarie has enlisted the support of the UK-based Universities Superannuation Scheme to help fund the deal and ease foreign ownership concerns, sources said.

The bank is also pushing ahead with the sale of its 26 per cent stake in utility Thames Water for around £1.5 billion after the process was delayed by the Brexit vote in June.

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