Wisconsin Energy to Acquire Integrys Energy Group

On Monday, June 23, Wisconsin Energy Corp. announced that they intend to acquire Integrys Energy Group in a transaction valued at $9.1 billion in cash, stock, and assumed debt to form the single holding company WEC Energy Group, Inc.

The new entity is projected to have a regulated rate base of $16.8 billion in 2015 serving 4.3 million total gas and electric customers in Wisconsin, Illinois, Michigan, and Minnesota. Further, the group will operate nearly 71,000 miles of electric distribution lines and more than 44,000 miles of gas transmission and distribution lines. The group also plans to continue Integrys’ 5-year commitment to invest up to $3.5 billion in infrastructure and operational initiatives to maintain reliability and customer service.

Under combined holding company, Wisconsin Energy’s electric and gas utility, We Energies, will remain separate from Integrys’ utilities, Wisconsin Public Service, Peoples Gas, North Shore Gas, Minnesota Energy Resources, and Michigan Gas Utilities. Current customers will remain customers of the separate utilities and the rates will remain the same. Integrys plans to continue divestment of Integrys Energy Services, their non-regulated marketing subsidiary, and will continue with an agreement to sell Upper Peninsula Power Company to Balfour Beatty Infrastructure Partners.

The combined company will also hold a 60 percent share in American Transmission Company (ATC). Wisconsin Energy CEO Gale Klappa noted that, in order to maintain an independent and collaborative ATC, WEC is committing to only vote the roughly 34 percent ownership interest currently held by Integrys and distribute Wisconsin Energy’s 26 percent voting interest among other voting members. WEC will retain only the combined 60 percent economic interest in ATC.

Klappa will remain in the CEO position in the combined company and Integrys’ CEO and chairman Charlie Schrock plans to retire after the deal closes. The board of WEC Energy Group will consist of the nine Wisconsin Energy board members and three board members from the current Integrys board. Senior leadership roles in the new holding company will be filled by current senior officers at Wisconsin Energy. The group will be headquartered in Milwaukee with operating headquarters in Chicago, Green Bay, and Milwaukee. The company is currently uncertain whether the headquarters will remain in downtown Milwaukee, but stated that they will retain a strong presence in the downtown area.

The acquisition is subject to approvals from both company’s shareholders, the Federal Energy Regulatory Commission, Federal Communications Commissions, Public Service Commission of Wisconsin, Illinois Commerce Commission, Michigan Public Service Commission, and the Minnesota Public Utilities Commission. The acquisition is expected to close in the summer of 2015. More information can be found in the released frequently asked questions.