Tilt has a portfolio of operating assets in New Zealand and Australia and a significant development pipeline, Infratil said.
The company said it had recently received a number of enquiries in relation to its stake.
"Given strong demand for high-quality renewables platforms globally, Infratil considers it is prudent to assess alternatives for its Tilt shareholding, including divestment of its position," the company said in a statement.
"Any decision to pursue a particular proposal would need to demonstrate a material increase in expected returns and shareholder value relative to the current positive outlook," it said.
The strategic review will take up to six months.
Infratil chief executive Marko Bogoievski said Infratil remained committed to deploying capital in renewable energy globally.
"We continue to be highly supportive of Tilt and its management team, however, the strong interest in Tilt has tipped the balance in favour of initiating the strategic review today," he said.
Following construction of its Waipipi wind farm, Tilt will have 343 operating turbines across nine wind farms in Australia and New Zealand, with a total installed capacity of 836MW.
Tilt also has a development pipeline of wind and solar projects, with approvals for more than 2,500MW of installed capacity.
Mercury acknowledged that the Infratil initiated strategic review may result in an offer for all shares in Tilt but said "there is currently no arrangement between Infratil and Mercury in relation to Infratil's strategic review".
"Mercury is very satisfied with the performance to-date of its investment in Tilt and has not reached a position on the future of that investment," Mercury said.
In a separate statement, Renewables said its directors "begin preparations to be able to respond to such an offer".
At today's share price, Tilt has a market capitalisation of $1.61 billion.
By late morning, shares in Infratil had rallied by 19c or 3.2 per cent to $5.99 while Mercury's stock jumped by 13c or 2 per cent to $6.53.
