Rapid City, S.D.-based Black Hills Corp. and Sioux Falls, S.D.-based NorthWestern Energy Group Inc. will merge in an all-stock deal, forming a publicly traded electric and natural gas utility valued at $15.4 billion, the companies announced Tuesday (Aug. 19).
The transaction is expected to close in 12 to 15 months, pending regulatory approval.
In Arkansas, Black Hills Energy has 189,515 customers, a spokeswoman said. The combined company will have a new name and ticker symbol to be determined before the close of the transaction. The operating companies are expected to maintain their existing names.
According to transaction terms, 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. Black Hills shareholders will continue to hold the same number of shares of the combined company that they hold with Black Hills immediately before the close of the transaction.
The combined company will be based in Rapid City and serve about 2.1 million customers across eight states, including Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming.
“We are excited to bring our two highly complementary companies together to create significant long-term value for customers, employees, shareholders, and the communities we serve,” said Linn Evans, president and CEO of Black Hills Corp. “The combined company will have greater scale and financial strength to consistently deliver for customers across our service territories and invest at the pace and scale that today’s energy transformation demands.”
Evans plans to retire at the close of the transaction. Brian Bird, president and CEO of NorthWestern Energy, will be CEO of the combined company.
“Our merger with Black Hills will create a premier regional regulated utility company with a larger, more resilient platform consistent with mid-cap peers,” Bird said. “Together, we will be better positioned to meet rising demand, accelerate investment in energy and grid infrastructure, and support customers and communities through a rapidly evolving energy landscape.”
The combined company’s 11-member board of directors will include six directors designated by Black Hills, and five directors designated by NorthWestern, including Bird and Linda Sullivan, chair of the NorthWestern board. Steven Mills, chair of the Black Hills board, will be chair of the combined company’s board of directors.