A subsidiary of Hydro One Limited has entered into a $222m purchase agreement with Brookfield Infrastructure to acquire an electricity transmission business.
Brookfield Infrastructure owns and controls Great Lakes Power Transmission.
The deal also includes an investment of about $151m in outstanding indebtedness.
The company based in the Canadian province of Ontario will operate its new business along the eastern shore of Lake Superior, north and east of Sault Ste. Marie.
The Great Lakes Power Transmission business enjoys a rate base, which is the value of property on which a utility is allowed to earn a specified profit of approximately $219m.
The power transmission business features 560km of high and medium voltage 44-230kV transmission lines, 15 transmission stations, and a 12,000km² of infrastructure.
It is connected to the Hydro One’s Wawa and Mississagi transmission stations.
Once the transaction is completed, Hydro One will operate about 98% of the transmission capacity in Ontario.
Hydro One Limited president and CEO Mayo Schmidt said: “Following Hydro One’s successful IPO and the recent acquisition of three Local Distribution Companies, this transaction is further testament to the people and potential of Hydro One.
“Our intense focus on customers and communities, together with our disciplined approach to leveraging strategic opportunities, is an important combination as we move forward with the transformation of this company.”
National Bank Financial Markets served as its financial advisor for the transaction, while Osler, Hoskin & Harcourt acted as the legal counsel.
The transaction is conditional upon the satisfaction of customary closing conditions, and as well awaits the approvals of Canada’s Competition Act and the Ontario Energy Board.