Great Plains Energy and Westar Energy have announced a revised $14bn merger in order to address regulatory concerns related to the transaction.
The revised transaction is a stock-for-stock merger that involves no premium paid or received with respect to either company, no transaction debt, and no exchange of cash.
The combined entity is expected to offer electric utility service to nearly one million Kansas customers and nearly 600,000 customers in Missouri.
Westar Energy president and chief executive officer Mark Ruelle said: “The logic of combining these two companies is compelling. We are confident we have addressed the regulatory concerns with our originally-proposed transaction.”
The two energy companies will merge to form a new holding company with a new name to operate regulated electric utilities in Kansas and Missouri.
It will have operating headquarters in both Topeka, Kansas, and Kansas City, Missouri.
Great Plains Energy chairman, president and chief executive officer Terry Bassham said: “Combining Great Plains Energy and Westar Energy into one stronger, more diversified regulated utility has compelling strategic, operational and financial benefits.”
After the completion of the merger, Westar Energy shareholders will own nearly 52.5% in the combined entity, while Great Plains Energy shareholders will hold approximately 47.5%.
The combined company is expected to have nearly 13,000MW of generation capacity, almost 10,000 miles of transmission lines and more than 51,000 miles of distribution lines.
The merger is also estimated to result in cost savings and net operating efficiencies of about $35-45m in 2018, growing to $140-170m by 2021 and beyond.
The transaction is expected to be completed in the first half of 2018.
It is subject to receipt of regulatory approvals, including the Federal Energy Regulatory Commission, the Missouri Public Service Commission, the Kansas Corporation Commission (KCC), the Nuclear Regulatory Commission and clearance under the Hart-Scott-Rodino Act.
The revised transaction for the merger comes a year after the companies agreed to merge in a deal worth $12.2bn including debt.
Image: The two energy companies will merge to form a new holding company with a new name. Photo courtesy ofdan/FreeDigitalPhotos.net.