Macquarie Group Limited (ASX:MQG) has emerged as the front-runner to buy a stake of up to 50% in EnergyAustralia Pty Ltd, the country's electricity and gas supplier, in what would be a multibillion-dollar deal that would ramp up the structural upheaval taking place across the under-pressure sector. EnergyAustralia's parent, Hong Kong-listed CLP Holdings Limited (SEHK:2), has for months been looking for partnerships for the coal power-heavy Australian business to help make needed investments to underpin the significant transition to low-carbon energy. It is being advised by Morgan Stanley.

While CLP is in discussions to finalise a deal with Macquarie, sources close to discussions said talks with other interested parties continued. Such a deal would represent a major step-up in Macquarie's direct involvement in energy assets, especially in the domestic market, where its involvement is mostly limited to investments in battery storage through its Eku Energy business and in hydrogen ventures. It also has ambitions to grow a significant stake in Australia's emerging offshore wind sector through Corio Generation, part of its Green Investment Group.

A spokesman for Melbourne-based EnergyAustralia, the next biggest retailer of power and gas after AGL Energy and Origin Energy, declined to comment, as did a Macquarie spokeswoman. CLP didn't respond to a request for comment.