Utility investment group Duet is buying Energy Developments, a remote and clean power specialist, in a $1.4 billion deal.
The companies have agreed that Duet will pay $8 cash for each Energy Developments share, a 17% premium to the six-month average price.
This gives Energy Developments, which produces gas from landfill sites, a market capitalisation of about $1.407 billion.
Duet has launched a fully underwritten $1.67 billion equity raising to fund the acquisition.
Energy Developments major shareholders Greenspark Power Holdings Limited (67.1%), Investors Mutual Ltd (9.6%), Coopers Investors Pty Ltd (4.6%) and other shareholders (4.4%) have indicated support for the deal.
Energy Developments today also increased its 2015 full year guidance to earnings of $218 million from the previous range of $211 million to $216 million.
Duet shares are in a trading halt. Energy Developments shares were up almost 3% to $7.95.