8-KMaterial Agreements

CENTERPOINT ENERGY INC 8-K Report, Material Agreement (Apr 29, 2021)

Filed April 29, 2021For Securities:CNP

Summary

CenterPoint Energy, Inc. (CNP) announced a significant divestiture through its wholly-owned subsidiary, CenterPoint Energy Resources Corp., agreeing to sell its Arkansas and Oklahoma regulated natural gas local distribution company (LDC) businesses to Southern Col Midco, LLC, an affiliate of Summit Utilities, Inc. This transaction, valued at $2.150 billion, includes the recovery of $425 million in storm-related incremental natural gas costs incurred in February 2021, subject to customary adjustments. The sale marks a strategic move for CNP as it aims to streamline its operations and potentially focus on core markets. The completion of the transaction is contingent upon several regulatory approvals, including those from the Hart-Scott-Rodino Act, the Public Service Commission of Arkansas, and the Oklahoma Corporation Commission, along with other standard closing conditions. The deal is not subject to financing conditions and is anticipated to close by the end of 2021. Investors should monitor the progress of these regulatory approvals, as they are critical to the transaction's timeline and successful closure, which is expected within 12 to 15 months.

Key Highlights

  • 1CenterPoint Energy (CNP) to sell its Arkansas and Oklahoma natural gas LDC businesses for $2.150 billion.
  • 2The sale price includes $425 million for storm-related incremental natural gas costs.
  • 3The buyer is Southern Col Midco, LLC, an affiliate of Summit Utilities, Inc.
  • 4Transaction is subject to customary closing conditions, including antitrust and state regulatory approvals (Arkansas and Oklahoma).
  • 5The deal is not contingent on financing.
  • 6Expected closing date by the end of 2021, with a termination clause if not closed within 12-15 months.
  • 7This divestiture represents a strategic shift, potentially allowing CNP to focus on other areas of its business.

Frequently Asked Questions

CenterPoint Energy, through its subsidiary, is selling its regulated natural gas LDC businesses in Arkansas and Oklahoma for a purchase price of $2.150 billion. This amount includes recovery of $425 million in storm-related costs.

The buyer is Southern Col Midco, LLC, which is an affiliate of Summit Utilities, Inc.

The transaction is subject to several conditions, including the expiration of the Hart-Scott-Rodino waiting period, approval from the Public Service Commission of Arkansas, approval from the Oklahoma Corporation Commission, and other standard closing conditions related to the accuracy of representations and compliance with agreements.

The transaction is expected to close by the end of 2021, provided all closing conditions, particularly regulatory approvals, are met. The agreement includes a termination clause if the transaction does not close within 12 months (or 15 months if regulatory approval is the sole remaining condition).

No, the transaction is not subject to a financing condition, meaning the buyer has committed funds and does not need to secure external financing for the deal to proceed.