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Brookfield scoops SunEdison TerraForms for $2.5bn

In a highly anticipated deal, Brookfield has agreed to take a controlling stake in TerraForm Power and buy TerraForm Global outright.

Brookfield Asset Management has agreed with SunEdison to purchase the bankrupt clean energy company’s TerraForm Global and take a controlling interest in TerraForm Power in a $2.5 billion deal.

The transaction is an important step forward for SunEdison, which filed for bankruptcy nearly a year ago after a period of rapid growth fuelled by the TerraForm yieldco companies – publicly traded entities that hold renewable energy assets.

Under the agreement, Brookfield, Canada’s largest asset manager, said it would acquire a majority stake in TerraForm Power, increasing its 34 percent interest to 51 percent at $11.46 per share and giving the company a market value of $1.7 billion. Current TerraForm Power shareholders can either be paid in cash or receive $1.94 per existing share plus an additional share after the agreement closes.

Brookfield said it would buy TerraForm Global for $787 million in cash and assumed $455 million of debt. This equals $5.10 per share and a 20 percent premium to TerraForm Global’s closing stock price on Monday.

TerraForm Power holds close to 3GW of renewable generating capacity in North America, while TerraForm Global has close to 1GW spread throughout emerging markets like Brazil, India and China.

The deal caps months of interest and anticipation about whether Brookfield would make a move on the companies.

Last June, Brookfield began expressing interest when it started buying shares of TerraForm Power. The yieldco approved a stockholder protection agreement shortly after, a move that gave it more time to gauge interest from other investors.

In November, Brookfield proposed a buyout price for TerraForm Power at $13 per share and said a deal that did not include TerraForm Global would be possible. Both yieldcos entered exclusive talks with Brookfield by January.

SunEdison, once the world’s largest renewable energy provider, has been moving forward with restructuring by steadily shedding assets. It is likely bankruptcy proceedings will move more quickly now that its most complex holdings have been sold.