SPOKANE, Wash. (AP) - The sale of Spokane-based Avista Corp. to a Canadian energy company must still win approval from shareholders and regulators.
Hydro One, based in Toronto, Canada, announced Wednesday that it would pay $5.3 billion cash to buy Avista, which supplies electricity and natural gas service to customers in several Northwestern states.
The deal, expected to close next year, is subject to approval from shareholders and regulators in the various states Avista operates in, as well as the federal government.
Avista will be delisted from the New York Stock Exchange after the deal closes.
The sale price amounts to $53 per Avista share, a 24 percent premium over the company’s closing stock price Tuesday.
The companies say few changes are expected for Avista customers in Washington, Oregon, Idaho and Alaska.
“It preserves our identity and helps us continue to chart our own course in a rapidly consolidating utility industry,” said Scott Morris, chairman of Avista, which was founded in 1889.
“We believe this is absolutely the right partnership at the right time,” Morris said at a press conference Wednesday. “It will be business as usual.”
“You can expect the same local control and the same local company that you’ve had for 128 years,” Morris said.
Hydro One said Avista would retain its name and management team and operate as a subsidiary.
Spokane Mayor David Condon welcomed Hydro One to Spokane.
“We are encouraged to hear about Hydro One’s stated commitment to Spokane, Avista employees and the customers they serve,” Condon said.
Republican U.S. Rep. Cathy McMorris Rodgers, of Washington, who represents the region in Congress, said she looked forward to learning more about Hydro One.
“I’m pleased to hear of their dedication to the employees and ratepayers in Eastern Washington and to maintaining Avista’s legacy of economic development here in Spokane,” she said.
Avista has long been a key player in many Spokane business initiatives, including bringing the 1974 World’s Fair to the city, and recently helping develop the nation’s newest medical school here.
Morris, who will keep his job as company chairman, said no layoffs are expected among Avista’s 1,700 employees as a result of the sale.
The merger of the two companies should help keep power rates competitive in the long term, Morris said.
“We can spread out our costs over a larger customer base,” Morris said.
Avista is Spokane’s largest publicly traded company. The utility began as Washington Water Power Co., using the Spokane Falls to generate electricity. In 1999, it changed its name to Avista.
The company owns dams on the Spokane and Clark Fork rivers that generate about half of the electricity it supplies to customers. Avista also owns a biomass plant, natural gas-fired turbines and a share of a coal-generating plant in Colstrip, Montana.
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