FERC Approves ALLETE Privatization under $6.2B Deal with CPP, GIP

The United States Federal Energy Regulatory Commission (FERC) has approved power utility ALLETE Inc.’s acquisition by a partnership between Canada Pension Plan (CPP) Investments and Global Infrastructure Partners (GIP).

“FERC’s approval of ALLETE’s proposed transaction with CPP Investments and GIP marks an important milestone and brings us one step closer to realizing the benefits of this transaction for our customers, our communities, our co-workers, and our shareholders”, ALLETE chair, president and chief executive Bethany Owen said in a recent online statement.

Under the transaction announced May 6, the CPP Investments-GIP partnership will acquire the publicly issued shares of Duluth, Minnesota-based ALLETE for $67 a unit in cash. Inclusive of ALLETE’s debt, the transaction has a total value of $6.2 billion.

ALLETE maintained it expected the transaction to close mid-2025. Shareholders approved the deal August 21 with 97 percent of votes cast in favor. That represented about 74 percent of shares according to ALLETE.

The deal still awaits other regulatory approvals and other customary closing conditions.

CPP Investments and GIP will retain ALLETE’s leadership and workforce, honor union contracts, retain ALLETE’s headquarters and continue ALLETE’s plans and goals, according to the May announcement.

“Following the close of the acquisition, Minnesota Power and SWL&P will continue to be regulated by the Minnesota Public Utilities Commission, the Public Service Commission of Wisconsin and the Federal Energy Regulatory Commission”, ALLETE added.

“The acquisition is not expected to impact retail or municipal rates for utility customers”.

Owen said then, “Our ‘Sustainability-in-Action' strategy has secured ALLETE’s place as a clean-energy leader”.

“Transitioning to a private company with these strong partners will not only limit our exposure to volatile financial markets, it also will ensure ALLETE has access to the significant capital needed for our planned investments now and over the long term”, Owen added.

James Bryce, managing director and global head of infrastructure at CPP Investments, said, “ALLETE is at the forefront of the clean energy transition and we are thrilled to support the delivery of the company’s ‘Sustainability-in-Action’ strategy, which we believe will generate substantial value both for ALLETE’s customers and CPP contributors and beneficiaries”.

Adebayo Ogunlesi, GIP chair and chief executive said, “GIP, alongside CPP Investments, look forward to partnering to provide ALLETE with additional capital so they can continue to decarbonize their business to benefit the customers and communities they serve”.

“Bringing together ALLETE, with its demonstrated commitment to clean energy, with GIP, one of the world’s premier developers of renewable power, furthers our commitment to serve growing market needs for affordable, carbon-free and more secure sources of energy”, Ogunlesi added.

To contact the author, email jov.onsat@rigzone.com