Wisconsin Energy Corp. announced today it plans to acquire Integrys Energy Group Inc. for $9.1 billion in cash and stock, creating WEC Energy Group Inc., the eighth largest natural gas distributor in the country.
Wisconsin Energy Corp. said it plans to keep its corporate headquarters in the “metropolitan Milwaukee area” once the deal is completed, but didn’t commit to a City of Milwaukee headquarters. Wisconsin Energy Corp. is currently headquartered at 221 W. Michigan St. in Milwaukee.
“At this point all we know is that accommodating a headquarters for us, a combined company, is going to have an impact on our space,” said Rick White, vice president of corporate communications at Wisconsin Energy Corp. “We’ll have operational headquarters in the city as we do now, Green Bay and Chicago. But just looking at our current facilities and what we have now, what we might need, we just don’t know.”
White said he expects WEC Energy will be bringing employees of the combined company to the headquarters, but isn’t sure yet how many might be transferred to or hired in the Milwaukee area. The deal isn’t expected to close and pass regulatory approval until summer 2015.
In a conference call with financial analysts this morning, Wisconsin Energy CEO Gale Klappa indicated infrastructure costs will be passed on to ratepayers to finance ongoing projects.
“We see very significant rate-based growth for needed infrastructure and no additional equity,” Klappa said. “Over time, as we find efficiencies, share best practices … that will really benefit our customers over time.”
Several law firms today announced plans for possible legal action on behalf of Integrys shareholders who they believe may not have been compensated adequately. Shareholders are to receive $71.47 per share.
“Integrys directors were required to do everything they could to maximize shareholder value, and we don’t think that the $71.47 per share deal price is adequate,” said Scott Holleman, attorney at Johnson & Weaver.
The combined entity is projected to have a regulated rate base of $16.8 billion in 2015, serve more than 4.3 million total gas and electric customers across Wisconsin, Illinois, Michigan and Minnesota, and operate nearly 71,000 miles of electric distribution lines and more than 44,000 miles of gas transmission and distribution lines. WEC Energy will also hold a 60 percent stake in Pewaukee-based power line company American Transmission Co.
WPS and WE Energies are just two of seven companies that will operate under the WEC Energy Group umbrella. The others are Peoples Gas, North Shore Gas, Minnesota Energy Resources and Michigan Gas Utilities.
“Today’s announcement is good news for two great Wisconsin companies,” said Gov. Scott Walker. This purchase will strengthen Wisconsin Energy overall and result in better service for their local ratepayers.”
