Hydro One in cash deal to buy Avista for C$6.7B
TORONTO — Hydro One Ltd. has signed a friendly deal to acquire U.S. energy company Avista Corp. for C$6.7 billion in an all-cash deal that would create one of the largest regulated utilities in North America.
The Toronto-based company said Wednesday after the close of markets it will pay C$67 per share in cash for the U.S. firm.
Shares in Avista closed Wednesday at US$43.33 on the New York Stock Exchange.
“This transaction demonstrates the power and value of the transition into an investor-owned utility, by allowing for healthy expansion into new lines of regulated utility business and new jurisdictions, such as the U.S. Pacific Northwest which is experiencing customer and economic growth,” Hydro One CEO Mayo Schmidt said in a statement.
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 standalone utility in Washington, Oregon, Idaho, Montana and Alaska.
“Through this agreement, we have a unique opportunity to secure a partnership that allows us to continue to define and control, to a significant degree, future operations and opportunities in a consolidating industry landscape for the benefit of our customers,” Avista chair and CEO Scott Morris said in a statement.
“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.”
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 public with much fanfare, 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 largest shareholder in Hydro One, the provincial government stands to benefit from the acquisition, which is poised to reap returns beginning in 2019, provincial Energy Minister Glenn Thibeault said.