February 13 (Renewables Now) – US utility American Electric Power Company Inc (NYSE:AEP) has agreed to acquire Sempra Energy’s (NYSE:SRE) renewables business and its 724-MW portfolio of wind and battery storage capacity in a deal worth USD 1.06 billion (EUR 935m).
Under the transaction, AEP will take over Sempra Renewables LLC and its entire or partial shareholding in seven operational wind parks and a battery storage facility in Colorado, Hawaii, Indiana, Kansas, Michigan, Minnesota and Pennsylvania. Sempra Renewables currently owns five of the particular wind farms together with BP Wind Energy, which will keep its ownership in the assets, all of which operate under long-term contracts.
The acquisition price includes a cash payment of USD 551 million, the assumption of USD 343 million in project debt and some USD 162 million in tax equity obligation. The buyer noted, however, that this is not the final cost, as it will be subject to closing and working capital adjustments. It plans to finance the transaction through debt, equity and/or equity-linked securities.
Nicholas K Akins, AEP’s chairman, president and CEO, explained that the acquisition fits with the utility’s goal to diversify its power generation portfolio and invest USD 2.2 billion in “competitive, contracted renewables” by 2023. He pointed out that the Sempra Renewables’ business also includes a pipeline of development projects that could provide additional value to AEP.
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