Renewables

Algonquin Power & Utilities selling renewable business for up to $2.5B

The company aims to sell its renewables business to a wholly-owned subsidiary of LS Power for total consideration of up to $2.5 billion.

Algonquin Power & Utilities selling renewable business for up to $2.5B
(Photo by ZHANG FENGSHENG on Unsplash)

Algonquin Power & Utilities announced that it has entered into a definitive agreement to sell its renewable energy business (excluding hydro) to a wholly-owned subsidiary of LS Power for a total consideration of up to $2.5 billion.

“We are pleased to announce this important transaction with LS Power, which is the result of a highly competitive strategic sale process,” said Chris Huskilson, CEO of AQN. “This major milestone, coupled with our previously announced agreement to support the sale of our Atlantica shares, delivers on our plan to transform AQN into a pure play regulated utility, optimize our regulated business activities, strengthen our balance sheet, and enhance our quality of earnings. We are confident that our path towards a pure play regulated utility supports our objective to create long term value for our customers and shareholders.”

The sale is subject to the satisfaction of customary closing conditions, including the approval of the U.S. Federal Energy Regulatory Commission and approval under applicable competition laws. The Company expects the transaction to close in the fourth quarter of 2024 or the first quarter of 2025 and to receive estimated cash proceeds of approximately $1.6 billion (excluding the earn out) after repaying construction financing, and net of taxes, transaction fees, and other closing adjustments.

Algonquin Power & Utilities isn’t the only company to shed its utility-scale renewables business lately. Last year, Brookfield Renewable announced it would buy Duke Energy’s utility-scale renewable energy business for $2.8 billion.

Duke began shopping its renewables division in September 2022 as it sought to focus on the growth of its regulated businesses. The sale agreement included more than 3,400 MWac of utility-scale solar, wind, and battery storage across the U.S., net of joint venture partners ownership, in addition to operations, new project development, and current projects under construction.

Also last year, RWE AG finalized its $6.8 billion acquisition of all shares in Con Edison Clean Energy Businesses. The transaction made the newly dubbed RWE Clean Energy one of the five largest renewable energy companies in the U.S. and the country’s second-largest solar owner and operator.

The acquisition included a portfolio of 8 GW of renewable energy projects and a development platform of more than 24 GW. Around 60% of the portfolio is onshore wind and 40% solar. Con Edison said it continues to invest in clean energy transmission projects, building electrification, energy efficiency, electric vehicle infrastructure, battery storage, and other technologies. The utility said it also wants to invest in and operate renewable generation in New York.

Originally published in Renewable Energy World.