Summary
American Electric Power Company, Inc. (AEP) announced on September 13, 2016, that its subsidiaries, AEP Generation Resources Inc. and AEP Generating Company, have entered into a definitive agreement to sell four electricity generation plants to a joint venture formed by affiliates of The Blackstone Group and ArcLight Capital Partners LLC. The total sale price is approximately $2.17 billion in cash, subject to certain customary adjustments at closing. This divestiture includes approximately 5,200 megawatts of coal and natural gas-fired generation capacity located in the PJM Interconnection wholesale market. The sale is a significant strategic move for AEP, likely aimed at streamlining its generation portfolio and potentially reducing exposure to certain types of generation assets. Investors should monitor the closing conditions, including regulatory approvals and consent decree modifications, as they are key to the completion of this substantial transaction.
Key Highlights
- 1AEP subsidiaries to sell four power generation plants for approximately $2.17 billion cash.
- 2The sale involves approximately 5,200 MW of coal and natural gas-fired generation capacity.
- 3The assets are located in the PJM Interconnection wholesale market.
- 4The buyers are a joint venture by affiliates of The Blackstone Group and ArcLight Capital Partners LLC.
- 5The transaction is subject to customary closing conditions, including regulatory approvals (FERC, Indiana Utility Regulatory Commission, HSR Act).
- 6A modification of a Consent Decree related to the Clean Air Act also requires court approval.
- 7The transaction is expected to close within six months.