8-KMaterial AgreementsRegulation FDOther Events+1

American Water Works Company, Inc. 8-K Report, Material Agreement (Nov 20, 2019)

Filed November 20, 2019For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) announced a significant divestiture and a smaller sale in an 8-K filing on November 20, 2019. The company has entered into a Stock Purchase Agreement to sell its New York regulated utility operations, New York American Water Company, Inc. (NYAW), to Liberty Utilities Co. for approximately $608 million in cash. This strategic move aims to streamline operations and potentially reallocate capital. The sale is subject to customary closing conditions, including regulatory approval from the New York State Public Service Commission (NYSPSC) and antitrust review. The company anticipates the closing of this transaction in the latter half of 2020. In addition to the major divestiture, AWK also announced the sale of its subsidiary, Water Solutions Holdings, LLC (WSH), which operates Keystone Clearwater Solutions, to SC Water LLC for $31 million in cash. Keystone provides water transportation services to the natural gas and oil industry in the Appalachian Basin. This transaction is expected to close in the fourth quarter of 2019. These transactions collectively represent a strategic shift for American Water Works, focusing on core regulated utility operations and potentially unlocking shareholder value through capital optimization.

Key Highlights

  • 1American Water Works Company, Inc. (AWK) to sell its New York regulated utility operations (NYAW) for approximately $608 million in cash to Liberty Utilities Co.
  • 2The sale of NYAW is subject to significant conditions, including approval by the New York State Public Service Commission (NYSPSC) and antitrust clearance.
  • 3The transaction for NYAW is expected to close in the latter half of 2020.
  • 4AWK is also selling its subsidiary, Water Solutions Holdings, LLC (which includes Keystone Clearwater Solutions), for $31 million in cash to SC Water LLC.
  • 5The sale of Keystone Clearwater Solutions is expected to close in the fourth quarter of 2019.
  • 6These divestitures are part of a strategic review by American Water Works.
  • 7The sale of NYAW is not subject to any financing condition.

Frequently Asked Questions

American Water Works Company, Inc. (AWK) announced an agreement to sell its New York regulated utility operations, New York American Water Company, Inc. (NYAW), to Liberty Utilities Co. for approximately $608 million in cash.

The sale of NYAW is contingent upon several conditions, most notably obtaining approval from the New York State Public Service Commission (NYSPSC) without adverse terms, clearing antitrust waiting periods under the Hart-Scott-Rodino Act, and other customary closing conditions related to representations, warranties, and absence of prohibitive laws or orders.

The company estimates that the Stock Purchase Agreement for NYAW will be completed during the latter half of 2020.

Yes, AWK is also selling its subsidiary, Water Solutions Holdings, LLC (parent of Keystone Clearwater Solutions), which provides water transportation services to the natural gas and oil industry. This sale is for $31 million in cash to SC Water LLC and is expected to close in the fourth quarter of 2019.