TORONTO - Hydro One Ltd. (TSX:H) has signed a friendly deal to acquire U.S. company Avista Corp. for C$6.7 billion in an all-cash deal.
The Ontario utility says it will pay C$67 per share in cash for the utility.
Under the agreement, Avista would keep its existing corporate headquarters in Spokane, Wash., and continue to operate as a stand-alone utility in Washington, Oregon, Idaho, Montana and Alaska.
The companies say there will be no workforce reductions as a result of the merger.
Hydro One and Avista also say customer rates will not be affected by any of the costs associated with the transaction.
Ontario Energy Minister Glenn Thibeault praised the move in a statement releashed shortly after the merger was announced.
“Ontario is pleased to see today’s announcement of the proposed acquisition of Avista by Hydro One, as it is expected to deliver clear benefits for the company’s customers, employees and shareholders - including the people of Ontario, given the government’s position as the single largest shareholder in Hydro One," Thibeault said. "In particular, we welcome the fact that this proposed acquisition will not impact the rates that Ontario customers pay. Neither will it have any impact on local jobs."
Thibeault says the Ontario government is expected to see benefits from the company's additional regulated returns starting in 2019.
"Those benefits will be above and beyond the proceeds already attributed to the Ontario Trillium Trust as a result of the IPO and subsequent secondary offerings," Thibeault said.