The deal is expected to close in the second half of 2018, and is still subject to approval from common shareholders and various regulators.
Avista, a major energy provider in the Northwest, is being sold for $5.3 billion to a Canadian energy company.
Hydro One, a public company based in Toronto, announced Wednesday it is paying cash for Avista, which provides natural gas and electric service to about 350,000 homes, businesses and other customers across Eastern Washington, northern Idaho, south and eastern Oregon and Juneau, Alaska.
The companies said the sale will create North America’s 20th-largest investor-owned utility, with $25.4 billion in combined assets and about 7,500 employees. Hydro One already powers 1.3 million customers in Ontario.
Fast facts: Avista and Hydro One
Employees — Avista: 2,000; Hydro One: 5,500
Headquarters — Avista: Spokane; Hydro One: Toronto
Customers — Avista: 342,000 (natural gas), 379,000 (electricity); Hydro One: 1.3 million
Rate base — Avista: $3.1 billion USD; Hydro One: $14.1 billion USD
Sources: the companies
The acquisition price amounts to $53 per Avista share, a 24 percent premium over the company’s closing stock price Tuesday.
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A joint announcement from the two utilities says they plan to save money through “non-headcount efficiencies” — like supply-chain purchasing and IT — adding that no layoffs are planned as part of the deal. Avista is keeping its Spokane headquarters.
Avista and Hydro One said they don’t anticipate rate changes as part of the deal, or reductions to service.
The transaction is expected to close in the latter half of 2018, but is subject to approval from common shareholders and regulators in the various states Avista operates in, as well as the federal government. Here, the Washington Utilities and Transportation Commission must sign off on the deal.
A spokeswoman for the Washington Utilities and Transportation Commission said says the utilities have not yet filed for approval in the state, but they will need to prove a net benefit for customers. That means consumers could see a credit on their bill or some other financial protection.
After the acquisition closes, Avista (which trades under AVA) will be delisted from the New York Stock Exchange. In after-hours trading, Avista’s stock shot up about 19 percent soon after the deal was unveiled.
At its pre-announcement share price, Avista was the 21st most valuable public company in the state.
It’s the second major utility acquisition in Washington state by Canadian funds. Western Washington’s Puget Energy was acquired for $7.4 billion in 2009 by infrastructure investors, including the Canadian Pension Plan Investment Board and Australia’s Macquarie Group funds.