Hydro One Buying Avista for $6.7B
CBJ — Hydro One has signed a friendly deal to purchase U.S. energy company Avista Corp. for $6.7 billion in an all-cash deal that would create one of the largest regulated utilities in North America.
“This is really a proud moment for Canadians as we grow our business to become a North American leader,” said Hydro One CEO Mayo Schmidt during a press conference, adding Hydro One will be a more valuable company because of the transaction.
The companies said there will be no job losses as a result of the merger and customer rates will not be affected by any of the costs associated with the transaction.
Under the agreement, Avista would keep its existing corporate headquarters in Spokane, Wash., and continue to operate as a stand-alone utility in Washington, Oregon, Idaho, Montana and Alaska.
The deal was unanimously approved by the boards of both companies and is expected to close in the second half of 2018, subject to Avista shareholder and certain regulatory and government approvals.
In November 2015, Hydro One went partially public, raising $1.83 billion in one of the biggest and most politically charged initial public offerings in Canada. The partial sale of the utility was part of the Ontario government’s plan to raise money to fund transit and infrastructure projects.
As the single largest shareholder in Hydro One, the provincial government stands to benefit from the acquisition, which is poised to reap returns beginning in 2019, according to provincial Energy Minister Glenn Thibeault. “It is expected to deliver clear benefits for the company’s customers, employees and shareholders — including the people of Ontario,” Thibeault said in a statement.
Hydro One has more than 1.3 million customers, $25 billion in assets and employs 5,500 people. Avista provides electric and natural gas services to 721,000 customers.