The combined service territory of Wisconsin Energy
Corporation and Integrys.
Illustration from Wisconsin
Energy Corp. investor relations
WAUKESHA - With its
acquisition of Integrys Energy Group, Wisconsin Energy Corp.
will create a company serving 4.3 million gas and electric
customers in Wisconsin, Illinois, Michigan and Minnesota.
Wisconsin Energy, the
parent company of We Energies, will purchase Integrys for
$71.47 per share.
will receive 1.128 Wisconsin Energy shares and $18.58 in
cash for each share they own.
The total represents a
17.3 percent premium on Integrys’ closing price on Friday.
The total deal is worth $9.1 billion, including $5.8 billion
for Integrys shares and $3.3 billion of assumed Integrys
The combined company -
WEC Energy Group - will be the eighth largest natural gas
company in the country and will be headquartered in
metropolitan Milwaukee with operating headquarters in
Chicago, Green Bay and Milwaukee.
Energy Corp. is the 20th largest publicly trade electric and
gas utility. Integrys is the 34th largest. Combined, the new
company will be the 14th largest with a market value of $15
Wisconsin Energy CEO Gale
Klappa said the deal provided a unique opportunity for the
new combined company.
“The operational and
financial benefits to all of our stakeholders - from the
customers and communities we serve, to the people we employ,
to the shareholders who count on us to create value - are
clear, achievable and compelling,” Klappa said.
The board of each company
has signed off on the deal, but it is still subject to
shareholder approval, along with federal regulators and
those in each of the four states. The companies anticipate
closing next summer.
The combined company
would operate nearly 71,000 miles of electric distribution
lines and more than 44,000 miles of gas transmission and
WEC Energy Group would
also have more than a 60 percent stake in Pewaukee-based
American Transmission Company.
Anne Spaltholz, a
spokeswoman for ATC, said the company is proud of its
relationship with both companies and doesn’t expect the
acquisition will lead to any significant changes for ATC.
Klappa added the deal
would not hurt Wisconsin Energy’s growth rate, would be
largely credit neutral and would be accretive to earnings
per share in the first calendar year after closing.
Integrys Chairman and CEO
Charlie Schrock said during a conference call with analysts
that the company considered other logical possibilities for
a merger, but did not actively seek bids from any other
In a statement, Schrock
credited compatible operational philosophies - among other
reasons - for the combination making sense.
“Our shareholders will
receive an attractive premium for their investment and will
also benefit from the opportunity to participate in the
upside of the combination, including future value creation
and a growing dividend program,” he said.
Klappa will be CEO of the
new company. The board of Wisconsin Energy will add three
members of the Integrys board. Schrock will stay on as CEO
of Integrys until the deal is approved.