Industrial, Utilities, Industrial, Sourcing Renewables - July 18, 2016
NextEra terminates bid for Hawaiian Electric after regulators reject $4.3B deal
Following a decision by state regulators to reject NextEra Energy Inc.'s proposed bid for Hawaiian Electric Industries Inc., the two companies announced July 18 they are calling off their plans to merge.
The news comes about 18 months after NextEra first announced plans to purchase Hawaiian Electric and its electric utility subsidiaries in December 2014, and follows months of controversy over whether or not the deal would be in the best interests of Hawaiian Electric's customers and the state as it seeks to meet aggressive renewable energy goals. Hawaii's target is 100% by 2045; internal emails from within the utility holding company that were made public as part of the regulatory approval process indicated that its executives, prior to accepting NextEra's acquisition bid, were divided on whether or not Hawaiian Electric could manage that transition on its own.
The Hawaii Public Utilities Commission on July 15 rejected the proposed deal, saying it would not be in the public interest.
NextEra is one of the largest investor owned utility holding companies in the U.S.; it is also a major player in the renewable energy generation space through its unregulated power subsidiary NextEra Energy Resources LLC, and its yieldco subsidiary, NextEra Energy Partners LP.
"As a result of the [Hawaii Public Utilities Commission]'s order, we have terminated our merger agreement," NextEra Energy Chairman and CEO Jim Robo said in a July 18 statement.
In a separate July 18 statement, Hawaiian Electric further outlined its plans for the future as an independent company following the termination of the deal with NextEra.
"While the merger would have provided significant benefits for Hawaii, [Hawaiian Electric] remains a strong company that is well-positioned to achieve our goals and provide long-term value for our customers, community, employees and shareholders," said Connie Lau, Hawaiian Electric's president, CEO and chairman.
Under the terms of the merger agreement, and up to $5 million for reimbursement of expenses associated with the transaction.
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