Meridian Energy, New Zealand's largest electricity generator, has sold its Australian business to a consortium including oil giant Shell for more than $750 million. 

This morning Wellington-headquartered Meridian said Shell would become the owner of its retail business, Powershop Australia while Infrastructure Capital Group would own its generation assets. 

As well as the Mt Mercer and Mt Millar wind farms, Meridian Australia owns three hydro stations, Hume, Burrinjuck and Keepit, and a number of development assets. 

The total sale price was A$729m ($753m) although Meridian said this could be adjusted depending on when the sale is completed, which it expected to be in the first quarter of 2022. 

A spokeswoman said the sales price represented a premium to Meridian Australia's indicative book value of around 50 per cent, and was 21 times Meridian Australia's 2021 earnings. 

Despite the gain, Meridian shares opened lower, down arou 1 per cent to $4.58, the lowest level since July 2020. Meridian's shares, like the other major electricity companies, are sensitive to rising interest rate expectations. 

Meridian chief executive Neal Barclay said in a statement that the sale was "an outstanding result for Meridian's shareholders and a testament to the quality of the Meridian Energy Australia business and the employees who have been dedicated to its success". 

The sale could see some of the proceeds returned to shareholders, which include the New Zealand Government, which owns 51 per cent of the company. 

"Meridian will continue to consider capital structure, dividend policy and future opportunities for re-investment of the proceeds as settlement of the transaction approaches. A further update will be provided at the company's interim results presentation on 23 February 2022." 

Depending on weather conditions Meridian generates more than a third of New Zealand's entire electricity consumption. 

It is the second time Meridian has entered, then exited, the Australian market. In 2003 it purchased Southern Hydro, a business it sold in 2005 to AGL Energy. 

Then in 2018 Meridian bought its current Australian hydro stations from TrustPower, which had demerged Tilt Renewables and was selling its remaining Australian business to focus on New Zealand. 

The sale includes a number of conditions, including Shell receiving approval from the Australian version of the Overseas Investment Office. 

Flux Federation, a Meridian subsidiary which supports Powershop Australia's retail business, will continue to work with the new owners of the business for at least three years, Meridian said. Flux has a call centre based in Masterton. 

Flux is excited at the prospect of partnering with the new owner of Powershop's business in Australia, Shell, and the opportunities that may be pursued together in the future. 

"With emissions the problem, and renewable energy the solution, the buyers are readying to invest heavily in a cleaner future," Barclay said. 

"The Meridian Australia team will be at the heart of a transformation that is not only good for Australia, but also the planet."