The NSW power privatisation process is nowhere near completion, but most observers think Origin Energy is best placed to buy the largest, Energy Australia. AGL has said it will face competition hurdles in buying the gas customers of Energy Australia.

Merrill Lynch therefore thinks AGL will most likely buy Integral Energy, Country Energy or both plus gentrader. The broker estimates that if AGL acquired all of the above the most capital intensive purchase would cost less than $2 billion.