Black Hills, Aquila merger clears Iowa regulatory hurdle

By Lisa Kerner

Charlotte, N.C., Sept. 5 - The merger of Black Hills Corp. and Aquila, Inc. cleared another hurdle after the Iowa Utilities Board approved Black Hill's proposed acquisition of Aquila's natural gas utility assets and operations in Iowa. The state's Office of the Consumer Advocate also reached a settlement agreement.

Black Hills and Aquila have filed for regulatory approvals in Colorado, Kansas and Nebraska.

"Through the settlement process, we received valuable input and cooperation from the Iowa Office of Consumer Advocate," Black Hills chairman, president and chief executive officer David R. Emery said in a company news release.

"Black Hills looks forward to serving customers in Iowa, and will work diligently to complete the requirements for obtaining regulatory approval by the utility commissions in other states."

As previously reported, Black Hills and Great Plains Energy Inc. will each acquire portions of Aquila in separate transactions.

Aquila shareholders will vote Oct. 9 and Great Plains shareholders will vote Oct. 10 on the proposed merger of the two companies.

Great Plains will acquire all the outstanding shares of Aquila and its Missouri-based electric utility assets for $1.80 in cash plus 0.0856 of a share of Great Plains common stock for each share of Aquila common stock. The transaction, valued at $4.54 per share or about $1.7 billion, includes the assumption of some $1 billion of Aquila's net debt.

Black Hills will acquire Aquila's electric utility in Colorado, its gas utilities in Colorado, Kansas, Nebraska and Iowa and its associated liabilities for $940 million in cash immediately prior to Great Plains' acquisition of Aquila.

Based in Kansas City, Mo., Aquila owns electric power generation assets and operates electric and natural gas transmission and distribution networks.

Great Plains is a Kansas City, Mo., holding company for Kansas City Power & Light and Strategic Energy, LLC. Black Hills is a diversified energy company based in Rapid City, S.D.

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