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Origin Contact Merger - Attachment 1 - Highlights

Attachment 1 - Highlights

Origin and Contact agree to merge to create Australasia's largest integrated energy group

Origin Energy and Contact Energy agree to merge by DLC to create Australasia's largest integrated energy group with a market capitalisation of A$7 billion and more than 200,000 shareholders across Australia and New Zealand.

- The combined group will have:

o total assets of A$8.8 billion, sales in excess of A$5.5 billion and EBITDA in excess of A$1 billion.

o more than 2.6 million energy customers across Australia and New Zealand.

o equity interests in around 3,000 megawatts of generation capacity .

o over 2,000 PJe of proved and probable reserves.

o substantial exploration and production assets across Australia and the largest exploration acreage position in New Zealand.

- The greater scale and diversity in the business will reduce risk and enhance predictability of profits and cash flows.

As a combined business ContactOrigin:

- can eliminate conflicts and inefficiencies at a strategic and operational level that arise under the current ownership structure.

- will benefit significantly from managing its financial position on a unified basis.

- can better manage the strategic challenges Contact Energy faces in New Zealand and create more opportunities for both companies to grow.

As a result Contact Energy shareholders will benefit from:

- a special dividend paid by taxable bonus share of 7.3 shares per 100 existing shares and a dividend of NZ$0.05 per share.

- a final dividend for current financial year of NZ$0.15 per share (on the increased number of Contact Energy shares on issue).

- increased earnings per share and cash flow per share.

- the advantage of holding shares in the merged business through a New Zealand listed company thereby retaining the benefits of dividend imputation.

And Origin Energy shareholders will benefit from:

- an immediate and significant increase over their current dividends. Origin Energy shareholders will receive the $A equivalent of the Contact final dividend for the current financial year (on the increased number of Origin Energy shares on issue).

- a DLC dividend policy targeting payment of a fully imputed/franked dividend and a payout ratio of 60%. Future dividends will be at least consistent with the dividends Contact shareholders should have otherwise expected to receive.


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