8-KMaterial AgreementsRegulation FDOther Events+1

CONSOLIDATED EDISON INC 8-K Report, Material Agreement (Sep 20, 2018)

Filed September 20, 2018For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) announced a significant strategic acquisition on September 20, 2018, entering into an agreement to purchase Sempra Solar Holdings, LLC for $1,540 million. This acquisition will significantly expand Con Edison's renewable energy portfolio, adding 981 MW AC of operating renewable electric production projects, along with development rights for solar and energy storage projects. The transaction is expected to close near the end of 2018, subject to customary closing conditions including regulatory approvals. Con Edison intends to finance this acquisition through a combination of internally generated funds, increased issuance of common equity (up to $1,165 million, with $715 million allocated to the acquisition) and long-term debt. This move signals a clear commitment to expanding its presence in the renewable energy sector, diversifying its asset base beyond its traditional utility operations.

Key Highlights

  • 1Con Edison to acquire Sempra Solar Holdings, LLC for $1,540 million (subject to adjustments).
  • 2Acquisition adds 981 MW AC of operating renewable electric production projects and development rights.
  • 3Transaction includes existing project debt of $576 million (Sempra Solar) and $506 million (jointly owned projects).
  • 4Expected to close near the end of 2018, subject to regulatory approvals (HSR, FERC, DOE).
  • 5Con Edison plans to increase 2018 capital requirements through $1.8-$2.4 billion in long-term debt at utilities and up to $1,165 million in common equity issuance to fund the acquisition.
  • 6Acquired projects will be accounted for on a consolidated basis post-closing, a shift from the equity method for jointly-owned projects.
  • 7The company has guaranteed certain obligations of its subsidiary under the purchase agreement.

Frequently Asked Questions

This Form 8-K filing announces Con Edison's entry into a material definitive agreement to acquire Sempra Solar Holdings, LLC, detailing the terms of the purchase and the financing plans to support it.

The acquisition involves a purchase price of $1,540 million and includes significant renewable energy assets and associated debt. Con Edison plans to fund this through increased equity and debt issuances in 2018, impacting its capital structure and future financial statements as acquired assets will be consolidated.

Customary closing conditions include the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and approvals from the Federal Energy Regulatory Commission (FERC) and the U.S. Department of Energy.

Upon closing, Con Edison expects to account for the acquired projects, including those previously accounted for under the equity method (jointly-owned projects), on a consolidated basis.