Hydro One signs $6.7B deal to acquire U.S. utility

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 that it will pay $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 is really a proud moment for Canadians as we grow our business to become a North American leader,” Hydro One CEO Mayo Schmidt said during a news conference, adding Hydro One will be a more valuable company because of the transaction.

The companies said no jobs will be lost as a result of the merger and customer rates won’t 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.

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, provincial Energy Minister Glenn Thibeault said.

“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.

Meanwhile, Ontario NDP energy critic Peter Tabuns argued the move to create a “huge multinational utility” would mean less control over the province’s electricity system and more financial risk for Ontarians.

“It also raises real concerns about job security for Ontarians,” Tabuns said in a statement. “It’s clear that the new Hydro One’s first responsibility is to its international shareholders, not to the people of Ontario.”