Essential has also secured $750m investment from the Canada Pension Plan Investment Board
Essential has changed its name from Aqua America. (Credit: Pixabay/Adam Radosavljevic)
US-based water, wastewater and natural gas provider, Essential Utilities has completed the purchase of a Pittsburgh-based natural gas distribution company, Peoples for $4.275bn.
The transaction follows an agreement signed by Essential Utilities to acquire Peoples in October 2018.
Essential said that the transaction was financed through a mix of equity and debt. The regulatory approval from the Pennsylvania Public Utility Commission was received for the acquisition on 16 January this year.
Essential chairman and CEO Christopher Franklin said: “Today marks the beginning of an exciting new chapter in our combined companies’ histories.
“Together, we are poised to play an important role in solving our nation’s water and natural gas infrastructure challenges through thoughtful capital investment, operational excellence, environmental stewardship and a commitment to strengthening local communities.
“The closing of the transaction is good news for Aqua and Peoples customers, who will benefit from our more than 260 years of combined expertise and service.”
Essential has committed to provide $23m in rate credits for customers, as part of the regulatory approval for the deal with Peoples.
The joint company is planning to replace approximately 3,000 miles (4,828km) of old natural gas mains over about 15 years.
Essential has changed its name from Aqua America
On 3 February, Essential has changed its name from Aqua America.
In addition, the firm has also secured $750m investment from the Canada Pension Plan Investment Board (CPP Investments), which acquired about 21.7 million shares of Essential’s common stock via the transaction.
Essential currently serves approximately 5 million people across 10 states under the Aqua and Peoples brands.