Avista Announces Merger With Canadian Utility, Hydro One Limited
SPOKANE, WA - Avista Corporation today announced that it is merging with Hydro One Limited, creating a regulated electricity and natural gas business with over $25.4 billion in combined assets and more than two million retail and industrial customers. Hydro One is paying $53 per share of Avista in a $5.3 billion all-cash transaction.
The closing of the acquisition is expected to occur in the second half of 2018. Together, the companies will hold assets throughout North America including Ontario, Washington, Oregon, Idaho, Montana, and Alaska.
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.
"This marks a proud moment for Canadian champions as we grow our business into a North American leader," according to Hydro One Limited President and CEO Mayo Schmidt. "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."
"With a focus on operational excellence and building our earnings streams, we are positioned for long-term, sustainable growth," said Schmidt. "We are further accomplishing this goal by bringing together two companies with shared cultures and industry expertise to create a North American regulated utility leader. This combination means greater scale, diversity and financial flexibility."
Avista Chairman, President and CEO Scott Morris says the decision to team up with Hydro One at a time of strength and growth represents a win for their customers, employees, shareholders, and the communities they serve.
"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. 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," according to Avista Corporation Chairman, President, and CEO Scott Morris.
From Avista/Hydro One:
Avista employees and retirees will see a continuation of the company essentially as it is today. Customers of both companies will continue to be provided with safe, reliable and high quality energy. Hydro One and Avista customer rates will not be impacted by any of the costs associated with the transaction. The communities Avista serves will continue to benefit from the important philanthropy and economic development that Avista provides.
"In fact," Morris said, "Hydro One is committed to doing even more - nearly doubling Avista's current levels of community support."
"This is the coming together of two highly respected and reputable companies steeped in history and shared commitment to the communities they serve. Both teams also share a common vision and a dedication to serving customers safely and reliably every day," said Schmidt.
"The strength of the combined company enables the accelerated deployment of innovation programs and infrastructure upgrades for the benefit of customers while continuing to deliver on shareholder expectations for consistent, healthy, financial performance. Together, we will deliver even more possibilities for the shareholders, customers, employees, and communities we have the privilege of serving," said Schmidt.
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.