Brookfield Renewable Partners has proposed to take full ownership in US-based electricity utility TerraForm Power by acquiring the remaining 38% stake in the latter.

The proposed all-stock deal values TerraForm Power at $17.31 per share or $3.93bn, reported Reuters.

The electric utility owns and operates a renewable power portfolio that comprises more than 4GW of solar plants and wind farms located mainly in the US and the European Union. The company is engaged in acquiring operating solar and wind assets across North America and Western Europe.

Brookfield Renewable said that the proposed deal will consolidate its position among the largest publicly-traded pure-play renewable power platforms having $50bn in total power assets.

The deal also gives the company an equity capitalisation of around $16bn. Brookfield Renewable is the primary renewable power company of alternative asset manager Brookfield Asset Management.

As per the proposed all-stock deal, each of the shares of TerraForm Power that were not owned previously by Brookfield Renewable will be acquired for 0.36 Brookfield Renewable Corporation shares (BEPC shares).

BEPC is the Canadian subsidiary of Brookfield Renewable.

Brookfield Renewable CEO comments on the offer to TerraForm Power

Brookfield Renewable CEO Sachin Shah said: “We believe this transaction will create significant value for investors in both companies through a simplified corporate structure and continued sponsorship from Brookfield Asset Management.

“For Brookfield Renewable unitholders, this transaction is expected to be immediately accretive and further expands our portfolio in North America and Western Europe, all while delivering returns in-line with our targets. Further, the proposed transaction will enhance the liquidity of the BEPC shares.”

In response to the proposal, TerraForm Power’s board has set up a special committee, which is currently engaging financial and legal advisors to help in its review.

The electric utility, in a statement, said: “The Special Committee, in consultation with its advisors, will carefully review and consider the Proposal and pursue the course of action that it believes is in the best interests of TerraForm Power’s stockholders. TerraForm Power’s stockholders do not need to take any action at this time.”

TerraForm Power’s portfolio is currently made up of 2.4GW in wind power and 1.67GW in solar power. In the US, the company has an installed renewable energy capacity of 2.77GW, and in the European Union its assets have a combined capacity of 948MW.