Utility and energy company Allete will become a private entity through a $6.2 billion deal, the company announced.

Allete and a partnership led by Canada Pension Plan Investment Board and Global Infrastructure Partners (GIP) jointly announced that they have entered into a definitive agreement under which the partnership will acquire Allete for $67 per share in cash, or $6.2 billion including the assumption of debt.

Allete and its family of companies includes regulated utilities and renewable energy companies.

Following the close of the acquisition, Minnesota Power and SWL&P will continue to be regulated by the Minnesota Public Utilities Commission (MPUC), Public Service Commission of Wisconsin (PSCW) and Federal Energy Regulatory Commission (FERC). The acquisition is not expected to impact retail or municipal rates for utility customers, the companies said.

“Our ‘Sustainability-in-Action’ strategy has secured Allete’s place as a clean-energy leader. Through this transaction with CPP Investments and GIP, we will have access to the capital we need while keeping our customers, communities and co-workers at the forefront of all that we do, with continuity of our day-to-day operations, strategy and shared purpose and values,” said Allette Chief Executive Officer Bethany Owen.

In connection with the merger, CPP Investments and GIP will acquire all of the outstanding common shares of Allete for $67 per share in cash representing an enterprise value of about $6.2 billion, including Allete’s net debt. This represents a premium of about 19.1% to Allete’s closing share price on Dec. 4, 2023, the date prior to a Reuters report that Allete was exploring a sale. The consideration also represents a 22.1% premium to the 30-day volume weighted average share price prior to that date.

Minnesota Power was founded in 1906 and operates the largest hydroelectric system in Minnesota. Together, 11 stations provide a generating capacity of more than 120 MW. In addition, the company buys 250 MW of electricity from Manitoba Hydro in Canada, most of which comes from hydroelectric stations.

This article was originally published on Power-Grid International.

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