"Mercury and Trustpower are two highly complementary organisations, and this agreement would see the best of both being brought together for our customers," he said.
"We know customers value the convenience and ease of bundled services in their home and Trustpower has deep expertise in bundling products in a way that people clearly appreciate. We see this adding material value to our customers and Mercury.
"Bringing together the retail businesses of Mercury and Trustpower will also give us the scale to make meaningful investment in the underlying IT systems, driving greater innovation for our customers."
Hawksworth said the strength of Trustpower's retail offering was underpinned by a skilled and motivated team, with about 500 staff focused on retail, based in Tauranga and Ōamaru.
"We see a huge amount of talent and capability across both organisations, each with a strong focus on delivering the best possible outcomes for customers. We're excited for how we can continue to build on this together.
"Customers will continue to enjoy all the great services and support they have today with Trustpower and with Mercury and we're looking forward to unlocking even more benefits and products for them over time."
Trustpower is 51 owned by infrastruture investor Infratil.
In a statement, Infratil said it was supportive of the sale and intends to vote in favour of the deal at the Trustpower annual shareholder meeting in September.
The two businesses won't be fully integrated until their IT systems allow for an improved customer experience.
Mercury has secured a commitment for a new bank facility sufficient to finance the acquisition.
The transaction is conditional on Mercury obtaining Commerce Commission clearance for the purchase of Trustpower's retail business. Mercury will be working with the Commerce Commission to progress the application as efficiently as possible once filed.
The transaction is also conditional on the proposed TECT restructure being completed and shareholder approval. Local retail customers will remain beneficiaries of the trust following any sale.
The timing for regulatory approvals depends on several factors, including the current workload of the regulator. Mercury anticipates these conditions will be fulfilled and the transaction will be complete by the end of the year.
Chairman of TECT, which has a share in Trustpower, Bill Holland said the confirmation of the sale underscored the need for the changes to TECT and the importance of trustees acting when they did.
"The confirmation today of a conditional sale of Trustpower's retail business reaffirms how crucial it was for Trustees to act when we did to ensure that the rebate was protected for our existing beneficiaries under a change of ownership.
"It's great to see Mercury's commitment to retaining the business in Tauranga for the foreseeable future, and we look forward to the continued contribution of the business locally."
