Brookfield, blue-chip Alcoa strike $600m deal

Less than a year into its formation, Brookfield Renewable Energy Partners (BREP) has notched a deal with a Wall Street bellwether, purchasing a 351-megawatt hydroelectric dam project from high-profile aluminium producer Alcoa.

BREP purchased Tapaco, a “four-station hydroelectric project” located in North Carolina and Tennessee, for $600 million, according to publicly traded Alcoa, which announced the transaction Friday. A voicemail message left at Alcoa in Pittsburgh was not returned. The reason Alcoa, considered a blue-chip stock, parted with Tapaco could not be ascertained.

BREP, a $13 billion publicly listed vehicle formed in 2011 when Brookfield Asset Management (BAM) recombined its renewable energy business under a single portfolio, initiated a secondary offering in January that hauled in $300 million – cash Brookfield admitted would be spent acquiring businesses.

Tapaco was developed to power aluminium smelting, the company said. Alcoa developed the project from 1919 to 1957. Investment bank Morgan Stanley advised Alcoa. The deal pushed Alcoa to $8.71 a share on the New York Stock Exchange (NYSE), while Brookfield climbed to $28 on the Toronto Stock Exchange (TSE).

Brookfield in conceiving BREP sought to form a pure play renewable energy partnership comparable to its Brookfield Infrastructure Partners (BIP). A spokesman for Brookfield in Toronto did not return a voicemail message seeking additional comment.

In related news, Brookfield recently closed a deal for full ownership of Vespucio Norte, a toll road in Chile. The fund manager first bought into the project last year, along with Tunel San Cristobal, another toll road in Santiago.