Energy Giants NWE and Black Hills Corp to Merge

By Greg Peters • Tuesday, August 19 15:38 • Permanent Link

Black Hills Corp. and Northwestern Energy have announced a definitive agreement to combine in an all-stock, tax-free merger. The merger is expected to create a premier regional regulated electric and natural gas utility company with a pro forma market capitalization of approximately $7.8 billion and a combined enterprise value of $15.4 billion.

Under the terms of the agreement, NorthWestern shareholders will receive a fixed exchange ratio of 0.98 shares of Black Hills for each share of NorthWestern they own at the close of the transaction. Upon completion of the merger, Black Hills shareholders will own approximately 56% and NorthWestern shareholders will own approximately 44% of the combined company on a fully diluted basis.

The combined company will serve approximately 2.1 million customers across eight contiguous states and is expected to double the size of each company’s rate base to a total of approximately $11.4 billion. The companies’ current investment plans from 2025 to 2029 exceed $7 billion.

The combined company supports a long-term target EPS growth rate of 5% to 7%, greater than both Black Hills and NorthWestern on a standalone basis. It is expected to be accretive to each company’s EPS in the first year following the close of the transaction.

The transaction is expected to close in 12 to 15 months, subject to customary closing conditions, clearance under the Hart-Scott-Rodino Act, approval from each company's shareholders, and regulatory approvals.

The combined company will be headquartered in Rapid City, South Dakota, and will maintain a strong operational and leadership presence throughout the combined service territory. The combined company will have a new name and ticker symbol, to be determined prior to the close of the transaction.

The companies will host a joint conference call to discuss the transaction and provide further details to investors and stakeholders.

The press release did not include specific metrics from the previous period to compare the changes in various financial and operational aspects since the last period. Following these announcements, the company's shares moved 6.12%, and are now trading at a price of $58.29. For more information, read the company's full 8-K submission here.

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