MISSOULA, Mont. — Black Hills Corp. and NorthWestern Energy Group, Inc. announced Tuesday that their boards of directors unanimously approved an agreement to merge in an all-stock, tax-free transaction. The deal will create a regulated electric and natural gas utility company with a market capitalization of about $7.8 billion and a combined enterprise value of $15.4 billion.
NBC Montana reached out to NorthWestern Energy about the impacts to customer rates. NorthWestern spokesperson Jo Dee Black said in the long term, efficiencies of a larger company are expected to relieve upward pressure on rates.
According to the Montana Public Service Commission, NorthWestern has not filed a formal application for approval yet. The commission anticipates a filing within the next 60 to 75 days.
According to a press release, NorthWestern shareholders will receive 0.98 shares of Black Hills for each NorthWestern share, representing a roughly 4% premium based on recent stock prices. Following the transaction, Black Hills shareholders will own about 56% of the combined company, while NorthWestern shareholders will hold 44%. The combined utility will serve about 2.1 million customers across eight states, operating more than 38,000 miles of electric lines, 59,000 miles of natural gas lines, and 2.9 gigawatts of generation capacity.
Black Hills CEO Linn Evans will retire following the merger. In a press release, Evans said, “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 organizations. 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. Our vision is to be the energy partner of choice for our customers, communities, and investors, and this merger will accelerate our ability to achieve this goal.”
NorthWestern Energy CEO Brian Bird will lead the combined company.
“Our merger with Black Hills will create a premier regional regulated utility company with a larger, more resilient platform consistent with mid-cap peers,” Bird said. “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. NorthWestern and Black Hills are best-in-class operators, and we are confident that our closely aligned cultures and skilled workforces will enable us to successfully bring the companies together. We will remain a trusted energy partner to our customers and look forward to building a brighter future for the people, businesses, and communities we are privileged to serve.”
The new company will be headquartered in Rapid City, South Dakota, with an 11-member board made up of six Black Hills directors and five from NorthWestern. The merger, which requires shareholder and regulatory approval, is expected to close within 12 to 15 months.
Gov. Greg Gianforte released the following statement: “With rising demand on our power grid, consumers across Montana and the United States need access to affordable, reliable energy. I’m hopeful that today’s proposed merger of Northwestern Energy and Black Hills Energy will help increase the supply of affordable and reliable power for consumers, while creating more good-paying jobs. We look forward to engaging with Northwestern and Black Hills to learn more about the proposed merger. We’ll continue to work with our partners in both the public and private sectors to promote our ‘all-of-the-above’ energy strategy and diversify our portfolio to power our homes, schools, and businesses long into the future.”
Sen. Steve Daines released the following statement: “Energy security is national security, and Montana energy plays a massive role in powering our nation. Today’s proposal to merge Northwestern Energy and Black Hills Energy will help support jobs, provide an economic boost to our communities, and ensure Montanans have reliable access to the power grid. I look forward to hearing more about the proposal and I’ll always fight for the future of Made-In-Montana energy.”
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