Black Hills Corp. and NorthWestern Energy Group agreed to combine in an all-stock, tax-free merger to create a regional regulated electric and natural gas utility company.
The merged company has a combined enterprise value of $15.4 billion. Under the agreement announced Tuesday, NorthWestern shareholders will hold approximately 44% of the company, and Black Hills shareholders 56%.
The merger doubles the rate bases and provides increased investment opportunities, according to a joint statement from the companies. That includes doubling each company's rate base to a total $11.4 billion — $7 billion for electric and $4.4 billion for natural gas. That could serve over two million customers across eight states across both utilities.
The companies say creating a multi-state utility platform is a benefit to the public by reaching more customers and delivering more value, as well as plans to work towards long-term emissions reduction.
While the companies are announcing the merger now, the transaction won't be officially closed for at least a year, with a current expected timeline of 12-15 months. To do so, they need clearance under the Hart-Scott Rodino Act, approval from each company's shareholders and regulatory approvals from commissions in multiple states, including Montana, Nebraska, South Dakota and potentially Arkansas, and the Federal Energy Regulatory Commission.
