Parent company of KCP&L plans to purchase Westar Energy
Kansas City, Mo. ? Great Plains Energy on Tuesday announced plans to buy rival Westar for about $8.6 billion, creating one large power provider in Kansas and Missouri with more than 1.5 million customers.
The two companies say the combination will lower their costs and help reduce rate increases for customers.
Kansas City, Missouri-based Great Plains Energy owns Kansas City Power & Light, which provides power in Kansas and Missouri, while Westar’s customers are in Kansas.
Westar shareholders will receive $51 per share in cash and $9 per share in Great Plains Energy stock, while Great Plains will assume $3.6 billion in Westar debt. The companies value the deal at about $12.2 billion, when debt is included.
Shares of Great Plains Energy Inc. fell $1.82, or 5.9 percent, to $29.18 in afternoon trading Tuesday. Shares of Topeka, Kansas-based Westar Energy Inc. rose $3.36, or 6.3 percent, to $56.28.
The transaction, which still must get state and federal regulatory approval, is expected to be completed by next spring.
Once the transaction is complete, Great Plains will have 900,000 customers in Kansas and 600,000 in Missouri. It also will have the capacity to generate nearly 13,000 megawatts of electricity.
For years the two utilities have jointly owned and operated the Wolf Creek nuclear plant near Burlington, Kansas, and two coal-fired power plants in Kansas. The addition of Westar’s generating capacity also will give the combined company one of the largest wind generation portfolios in the U.S., the companies said.
Several law firms across the U.S. said Tuesday they are launching investigations into whether the acquisition would be fair to shareholders.
In 2008, Great Plains acquired Aquila Inc.’s electricity assets in a $1.7 billion deal that closed only after months of wrangling between the companies and the Missouri Public Service Commission.
Several industrial energy users and the Missouri public counsel, who represents customers before the PSC, challenged the acquisition, but the Missouri Supreme Court upheld the sale in July 2011.