Summary
NextEra Energy, Inc. (NEE) has entered into a definitive agreement to acquire Hawaiian Electric Industries, Inc. (HEI) in a merger transaction. Under the terms of the agreement, HEI shareholders will receive 0.2413 shares of NEE common stock for each share of HEI common stock they own. Prior to the merger's completion, HEI will distribute its banking subsidiary, ASB Hawaii, Inc., to its shareholders. The transaction is subject to customary closing conditions, including HEI shareholder approval, regulatory approvals (including from the Hawaii Public Utility Commission, FERC, and FCC), and antitrust clearance. Both companies' Boards of Directors have approved the merger agreement.
Key Highlights
- 1NextEra Energy (NEE) to acquire Hawaiian Electric Industries (HEI) through a merger.
- 2HEI shareholders to receive 0.2413 shares of NEE common stock per HEI share.
- 3HEI to spin off its banking subsidiary, ASB Hawaii, Inc. (ASBH), to its shareholders before the merger closes.
- 4The merger is subject to HEI shareholder approval (75% of common stock) and numerous regulatory approvals.
- 5Customary representations, warranties, and covenants are included in the merger agreement.
- 6A termination fee of $90 million and expense reimbursement of up to $5 million are stipulated.
- 7An investor presentation regarding the merger was released on December 3, 2014.
Frequently Asked Questions
The value for HEI shareholders will be determined by the exchange ratio of 0.2413 shares of NEE common stock for each HEI share owned, plus the value of the distributed shares of ASB Hawaii, Inc. The final value will depend on the stock prices of both NEE and ASB Hawaii at the time of closing and the market's reception to the combined entity.
Key conditions include approval by at least 75% of HEI's common shareholders, obtaining various regulatory approvals (Hawaii PUC, FERC, FCC, Hart-Scott-Rodino antitrust), effectiveness of the Form S-4 registration statement, listing approval for NEE shares on the NYSE, and confirmation that HEI will no longer be considered a savings and loan holding company post-spin-off. Both parties must also adhere to customary representations and warranties.
Prior to the completion of the merger with NextEra Energy, Hawaiian Electric Industries will distribute all of its outstanding shares of ASB Hawaii, Inc. (the parent company of American Savings Bank) to its shareholders on a pro-rata basis. This is referred to as the 'Bank Spin-Off'.
The merger agreement specifies that the transaction must be completed by December 3, 2015, with a possible six-month extension if necessary to obtain regulatory approvals. The filing also notes that the Form S-4 registration statement needs to become effective, and an investor presentation was released on December 3, 2014.