Great Plains Energy Inc., the parent company of Kansas City Power & Light Co. (KCP&L), is acquiring Kansas electric utility Westar Energy Inc. in a combined cash and stock transaction with an enterprise value of approximately $12.2 billion, including total equity value of approximately $8.6 billion.
Upon closing, Westar will become a wholly owned subsidiary of Great Plains Energy. With the addition of Westar’s generation fleet, Great Plains Energy will have a more diverse and sustainable generation portfolio, the companies say, adding that this will provide increased flexibility to mitigate the potential customer impacts from future carbon regulations.
In addition, among investor-owned utilities in the U.S., the combined company will have one of the largest portfolios of wind generation in the country, the companies note. Most recently in Kansas, Westar signed a 200 MW wind power agreement with an affiliate of NextEra Energy Resources and a 280 MW agreement with Infinity Wind Power.
Upon completion of the transaction, Terry Bassham, chairman and CEO of Great Plains Energy and KCP&L, will be chairman and CEO of the combined company. Mark Ruelle, president and CEO of Westar, will remain in his current role with Westar until the close of the transaction. In addition, Great Plains Energy will add one director from the Westar board of directors to the Great Plains Energy board of directors.
The companies anticipate making the required regulatory filings with the Kansas Corporation Commission and other regulatory entities during June and July. In addition, Great Plains Energy and Westar will seek shareholder approvals later this year. The transaction is subject to approvals from the Federal Energy Regulatory Commission and the Nuclear Regulatory Commission. The transaction also is subject to the notification, clearance and reporting requirements under the Hart-Scott-Rodino Act by the Federal Trade Commission and the U.S. Department of Justice. The companies anticipate closing the transaction in spring 2017. In the coming months, the companies will work together to develop an integration plan.
Goldman, Sachs & Co. served as the exclusive financial advisor, and Bracewell LLP served as legal advisor to Great Plains Energy. Guggenheim Securities LLC served as the sole financial advisor, and Baker Botts LLP served as legal advisor to Westar Energy.