Black Hills and the NorthWestern Energy Group have entered a definitive agreement for an all-stock, tax-free merger that will establish a regional electric and natural gas utility company with a pro forma market capitalisation of $7.8bn.
The combined company will serve more than two million customers across eight US states.
The proposed combination would result in a total enterprise value of $15.4bn based on both companies' stock prices as of 18 August 2025.
NorthWestern shareholders will receive a fixed exchange ratio of 0.98 shares of Black Hills per share owned at closing, representing a 4% premium based on average stock prices since discussions began in March 2025.
Black Hills investors will own 56% while NorthWestern shareholders will hold 44% of the combined company on a fully diluted basis.
Black Hills president and CEO Linn Evans stated: “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. Our future success will be driven equally by the people, assets and capabilities of both organisations.
“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.”
The new board for the merged entity will comprise six directors from Black Hills and five from NorthWestern, with headquarters in Rapid City, South Dakota.
Joint investment plans from 2025 to 2029 exceed $7bn, focusing on critical infrastructure for electricity and natural gas to cater to growing energy needs while maintaining competitive rates for consumers.
The merged company targets an earnings per share (EPS) growth rate between 5% and 7% annually, which is higher than either company's current standalone projections and anticipates accretive EPS in the first year after closing.
The transaction will be completed within 12 to 15 months, pending customary conditions. This includes obtaining clearance under the Hart-Scott-Rodino Act, securing shareholder approvals, and regulatory consents.
These approvals will involve commissions in the three states where both companies currently operate, Montana, Nebraska, South Dakota, and in Arkansas if needed, as well as Federal Energy Regulatory Commission endorsement.
NorthWestern Energy president and CEO Brian Bird stated: “Our merger with Black Hills will create a premier regional regulated utility company with a larger, more resilient platform consistent with mid-cap peers.
“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.”
Goldman Sachs acted as financial advisor for Black Hills, with Faegre Drinker Biddle & Reath providing legal counsel.
While Greenhill advised NorthWestern financially, alongside Morgan Lewis & Bockius handling legal matters.
In December 2024, NorthWestern Energy acquired a stake in the North Plains Connector HVDC (high-voltage direct current) transmission line. The 3GW line will extend 420 miles (676km), connecting Bismarck, North Dakota, to Colstrip, Montana.
