The Wesfarmers Ltd (ASX: WES) share price declined 0.29% today amid the speculation that the ASX retail share is interested in making another acquisition.
Wesfarmers is best known for owning businesses like Bunnings, Kmart and Officeworks. But, it has a growing portfolio of businesses that are in other sectors. The Wesfarmers chemicals, energy and fertiliser (WesCEF) business is the home of a number of the compelling industrial areas of the business, including the lithium project at Mt Holland.
Image source: Getty Images
Takeover plans?
According to reporting by The Australian, Wesfarmers is one of the potential buyers of Alinta Energy's Western Australia assets.
There could be synergy between the businesses considering Wesfarmers already operates Kleenheat which "produces, imports and distributes liquefied petroleum gas (LPG) to residential and commercial markets across WA and NT through a comprehensive network of distribution centres and dealers, as well as retailing natural gas to residential and commercial markets, and electricity to businesses in WA", according to Wesfarmers.
What are the Alinta assets that Wesfarmers may buy?
The Australian reported that it's the majority of Alinta Energy's Pilbara operations. Alinta will reportedly retain operational control and a minority stake.
Newman Power Station may be viewed as the key asset, which has a gas and distillate power station, with a battery storage system.
There is also an 11.8% stake in the 1,380km Goldfields gas pipeline, which transports gas from the Carnarvon basin producers in the northwest of the state to Kalgoorlie in the southeast. APA Group (ASX: APA) owns the rest of that particular pipeline asset.
It was reported that the power station generates 15% of Alinta's earnings before interest, tax, depreciation and amortisation (EBITDA). It's currently gas and diesel-powered, but it is being sold to investors with the idea that it can be powered by cleaner fuel.
Is anyone else interested?
The Australian reported that there are a number of different interested parties including private equity players Pacific Equity Partners and EQT, as well as Gina Rhinehart, CKI, Queensland Investment Corporation, APA Group, Andrew Forrest and Macquarie Group Ltd (ASX: MQG).
So, while there is a lot of competition, it was reported that APA is "highly motivated" to try to win the asset.
Foolish takeaway
Time will tell which group is successful in buying these assets. But, if it is Wesfarmers, then that will diversify the company's earnings even more, which could be a benefit for the Wesfarmers share price.
