Canadian electricity transmission and distribution utility Hydro One has signed a definitive merger agreement to purchase US-based energy company Avista for $5.3bn.
Following the deal, the companies will form a new regulated electricity and natural gas business, which will be headquartered in Toronto, Canada.
The combined company will be able to serve more than two million retail and industrial customers, holding assets across North America including Ontario, Washington, Oregon, Idaho, Montana, and Alaska.
The deal has already received approval from the boards of directors of both companies. However, it has not yet received Avista common shareholder approval and certain regulatory and government approvals.
Hydro One president and CEO Mayo Schmidt said: “This transaction demonstrates the power and value of the transition into an investor-owned utility, by allowing for healthy expansion into new lines of regulated utility business and new jurisdictions, such as the US Pacific Northwest which is experiencing customer and economic growth.
“With a focus on operational excellence and building our earnings streams, we are positioned for long-term, sustainable growth.”
After the completion of the deal, Avista will continue to operate from its corporate headquarters in Spokane, Washington. The company will also continue to operate as a standalone utility in Washington, Oregon, Idaho, Montana, and Alaska in the US.