Avista, Hydro One terminate agreement
Decision follows regulators’ rejection of $5.3 billion transactionJanuary 23rd, 2019
Spokane-based Avista Corp. and Hydro One Ltd., of Toronto, Ontario, say they’ve agreed mutually to terminate their previously announced acquisition agreement.
Termination of the $5.3 billion acquisition, through which Avista would have become a subsidiary of Hydro One, puts an end to the 18-month period during which the two power companies sought regulatory approval, a process that proved to be fruitless.
As required by the agreement, Hydro One will pay Avista a $103 million (U.S.) termination fee.
Scott L. Morris, chairman and CEO of Avista, said in a press release, “While disappointed with the outcome, I want to express our deepest gratitude to everyone who worked with us on this effort over the past 18 months. Avista is a strong, vibrant, and independent utility, and we look forward to building on our legacy of nearly 130 years.”
The decision to stop pursuing the acquisition came after the Washington Utilities and Transportation Commission rejected the merger in early December, followed by rejection of an appeal of that decision. Idaho regulators ruled against the acquisition also.
At the center of regulators’ concerns was an abrupt change in leadership at Hydro One that followed pressure from politicians in the company’s home province of Ontario. The government owns a 47 percent interest in Hydro One, and in its decision, the Idaho Public Utilities Commission said, “It’s abundantly clear that the Province does not have to own 51 percent of Hydro One in order to effectively control the company.”