AGL Energy has launched a $103 million takeover bid for rival retailer Australian Power and Gas in an effort to expand its presence in the country.

AGL has already acquired 19.9 per cent in Australian Power and Gas, which is based in Melbourne, for 52 cents a share. The company has now made a cash offer for the remaining shares in the company. The deal is subject to an approval from the Australian Competition and Consumer Commission. AGL indicated that it is confident in receiving an approval because the high churn rate in the industry would mean that there is no major impact on the competition.

"The acquisition of APG will further strengthen AGL's retail business. It will increase our total customers by approximately 10 per cent, effectively achieving our goal of 800,000 electricity customers in New South Wales," Mr Fraser said.

He also said that the company will be able to leverage its low cost customer serving model to serve APG customer base effectively. He said that the deal will offer significant value to APG shareholders and the APG customers will be able to access enhanced products and services. A majority of the APG's customers are in the state of Victoria and the acquisition will allow AGL to expand its presence in the state.