AltaGas set to complete $4.5bn acquisition of WGL

AltaGas is close to completing the $4.5bn acquisition of energy infrastructure company WGL Holdings after receiving a key approval from the Public Service Commission of the District of Columbia (DC PSC), US.

A settlement agreement signed in May between AltaGas, WGL and other parties has been approved by DC PSC and the stakeholders have accepted relevant conditions that come with the approval.

This represents the completion of the outstanding step in the regulatory review process and the transaction is now expected to close on 6 July.

AltaGas expects the merger to result in more than $138m in customer benefits across Washington, DC; Maryland and Virginia by offering energy at ‘affordable’ rates.

The companies have agreed to provide $41m in direct benefits to DC residents, businesses and the regional community through rate credits, workforce development initiatives, energy-efficiency improvements, repair works related to non-hazardous gas leaks, as well as the development of a new 10MW electric grid energy storage.

AltaGas president and CEO David Harris said: “The conditions crafted by the Commission are in alignment with the unanimous settlement agreement and the commitments made by AltaGas to safeguard and advance the public interest.

“The combination of AltaGas and WGL is a powerful one, with a North American footprint comprised of over $20bn of high quality, low-risk and long-lived infrastructure assets, and one which provides meaningful benefits for both customers and shareholders.”

According to the conditions set in the order by the DC PSC, the companies have agreed to support all service territories of WGL subsidiary Washington Gas across the three jurisdictions.

As well as Washington Gas, WGL has a contracted midstream franchise in the Marcellus/Utica, and owns power and energy marketing businesses throughout the US.

Once the transaction is completed, AltaGas will have assets worth C$22bn ($16.68bn).

The acquisition will diversify the company’s portfolio and offer growth opportunities in midstream, power and utilities segments.