The company said that the acquisition positions Drax as the world’s leading sustainable biomass generation and supply business.
Drax said the deal received overwhelming support from both sets of shareholders with 95.97% of Pinnacle’s and 99.99% of Drax’s shareholders voting in favour.
The statement added: "It transforms Drax into a truly international business, trading bioenergy from the North America continent to Europe and Asia, and positions the enlarged group to take advantage of global growth opportunities, with the market for biomass pellets for renewable generation in Europe and Asia expected to grow significantly."
The acquisition will increase Drax’s annual operational capacity to 4.9 million tonnes of sustainable biomass pellets from 2022, at 17 plants in locations across Western Canada and the US South, up from 1.6 million today.
It will also give the group access to four deep water port facilities and three major wood fibre baskets.
The statement added: "By advancing the strategy to increase self-supply and reduce biomass production costs, the acquisition paves the way for the company’s plans to deliver Bioenergy with Carbon Capture and Storage (BECCS), permanently removing millions of tonnes of carbon dioxide from the atmosphere each year.
"By becoming a world leader in BECCS, Drax can deliver on its purpose of enabling a zero carbon, lower cost energy future, and achieve its ambition to become a carbon negative company by 2030. Drax will seek to export its BECCS expertise around the world to support global efforts to address the climate emergency."
Will Gardiner, chief executive of Drax, said: “This is an exciting and important acquisition which positions Drax as the world’s leading sustainable biomass generation and supply business. I am delighted to welcome our new Pinnacle colleagues to the Drax family and look forward to what we can achieve together.
“As well as making Drax an international supplier of sustainable biomass, this deal advances our strategy to increase self-supply, reduce our own biomass production cost and create a long-term future for sustainable bioenergy. We expect to benefit greatly from Pinnacle’s operational and commercial expertise.
“Through this deal we are also advancing our plans to use BECCS to permanently remove millions of tonnes of carbon dioxide from the atmosphere each year and become a carbon negative company by 2030. Negative emissions from BECCS are vital if we are to address the global climate emergency. BECCS will also provide a significant share of the renewable electricity needed in a net zero economy, support green jobs and drive growth in a post-COVID recovery.”
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