Hydro One to acquire Avista in Canada-U.S. energy transmission combo
Ontario’s largest electricity transmission and distribution provider, Hydro One Limited (TSX:H) and Northwest U.S. energy provider Avista Corporation (NYSE:AVA) announced a definitive merger agreement under which Hydro One will acquire Avista for C$67 (US$53) per share in a C$6.7 billion (US$5.3 billion) all-cash transaction.
- Avista shareholders receive US$53 in cash per common share, a 24% premium as of market close on July 18, 2017
- Hydro One’s acquisition financing strategy involves the issuance of C$1.4 billion of Hydro One common equity and US$2.6 billion of Hydro One debt
- Avista preserves corporate identity including its headquarters; customers, employees, communities and shareholders all benefit from new partnership
- No workforce reductions are anticipated as a result of this transaction for either Hydro One or Avista
Hydro One and Avista will have over C$32.2 billion (US$25.4 billion) in combined assets and serve more than two million retail and industrial customers with assets throughout North America including Ontario, Washington, Oregon, Idaho, Montana and Alaska.
No workforce reductions are anticipated as a result of this transaction for either Avista or Hydro One, the companies said in a joint statement.
Avista Corporation Chairman, President and CEO Scott Morris said, “In Hydro One, we believe we’ve found a partner that allows us to preserve our identity and our proud legacy, while also preparing us for the future. We look forward to joining forces with Hydro One and its dynamic team.”
Following completion of the transaction, Avista will maintain its existing corporate headquarters in Spokane and will continue to operate as a standalone utility in Washington, Oregon, Idaho, Montana and Alaska.
Its management team and employees will remain in place and it will operate with its own Board of Directors representing the interests of the Pacific Northwest and the communities it serves. The combined company’s headquarters will be based in Toronto.
The transaction was unanimously approved by the Boards of Directors of both companies and is expected to close in the second half of 2018, subject to Avista common shareholder approval and certain regulatory and government approvals and clearances, including approval by the Washington Utilities and Transportation Commission, the Public Utility Commission of Oregon, the Idaho Public Utilities Commission, the Regulatory Commission of Alaska, the Public Service Commission of the State of Montana, the U.S. Federal Energy Regulatory Commission, clearance by the Committee on Foreign Investment in the United States and compliance with applicable requirements under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction of customary closing conditions.
Upon closing of the transaction, which is expected to occur in the second half of 2018, Avista’s management team will remain in place and it will operate with its own board of directors, the companies said. Avista will have a board of nine directors consisting of five members designated by Hydro One, including Mayo Schmidt, and four members designated by Avista, including Scott Morris, the CEO of Avista. Scott Morris will be the chair of the board of Avista post-merger.
On closing, Avista’s common stock will be delisted from the New York Stock Exchange (NYSE) while Hydro One’s common shares will continue to be listed on the Toronto Stock Exchange (TSX). The combined company will be operated from Ontario.
The closing of the acquisition is expected to occur by the second half of 2018, the companies said.
