Canadian energy utility Emera has signed a definite agreement to acquire US based energy utility Teco Energy in a $10.4bn transaction aiming to increase it portfolio in the US.
Teco Energy owns and operates utilities including Tampa Electric, Peoples Gas and New Mexico Gas.
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The transaction includes assumption of about $3.9bn in debt.
Majority of the assets under Teco Energy is in Florida, where the firm operates Tampa Electric and the regulated natural gas utility Peoples Gas.
While 56% of Teco’s assets are based in the US state, 23% is in Canada, 10% in New England, 6% in New Mexico and 5% in the Caribbean.
The deal is expected to increase Emera’s assets to around $20bn from the existing $9.89bn and increase its electric and gas customer base to over 2.4 million. .
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By GlobalDataIt will allow Emera to step into the local distribution business for regulated natural gas, thereby expanding its horizon in the energy markets.
Emera president and CEO Chris Huskilson said: "Our patient approach and disciplined investment criteria have resulted in a pure-play regulated utility transaction that we expect to be significantly accretive for Emera’s shareholders, and one that advances our strategic objectives.
"Emera recognises that TECO Energy and its employees are a vital presence in Florida and New Mexico, and will look to preserve that presence by further investing in TECO Energy’s existing employee base and communities, as has been done in other Emera acquisitions."
While TECO Energy, Tampa Electric and Peoples Gas will continue to operate from their headquarters in Tampa, Florida, New Mexico Gas will be operating from its headquarters at Albuquerque, New Mexico, following the acquisition.
The deal is subject to common shareholder approval of Teco Energy and regulatory approval including from New Mexico Public Regulation Commission, the Federal Energy Regulatory Commission and compliance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
After closure of the all cash deal by mid-2016, Teco Energy will operate as wholly unit of Emera.
Image: Emera head office in Halifax, Nova Scotia, Canada. Photo courtesy of WayeMason.
