Deals
Behind $8.6 Billion Deal for Westar Is a Hunt for Growth
- Deal to almost triple Great Plains’ debt, double customer base
- U.S. utility deals worth $52 billion in 2015, most since 2011
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So great is the hunger for growth in the U.S. power sector that Great Plains Energy Inc. is willing to almost triple its debt and risk a lower credit rating to buy neighbor Westar Energy Inc. in an $8.6 billion deal.
The Kansas City, Missouri, utility owner is paying a premium of at least 23 times Westar’s expected earnings next year, making their merger one of the richest utility deals in recent history, according to SunTrust Robinson Humphrey Inc. and Evercore ISI. The company, which had a market value of about $4.5 billion on Tuesday, will almost double its electricity customers by buying Westar, with a value of almost $8 billion.