Black Hills, NorthWestern Energy To Merge, Strengthening Regional Utility Footprint

Black Hills Corp. BKH and NorthWestern Energy Group Inc. NWE unveiled plans on Tuesday to merge in an all-stock, tax-free transaction. The merger would create a regulated utility giant with a market capitalization of roughly $7.8 billion and an enterprise value of $15.4 billion.

The deal, unanimously approved by both boards, aims to form a stronger regional provider of electricity and natural gas across the central United States.

The combined company will serve about 2.1 million customers in eight states, including Montana, South Dakota, Nebraska, and Wyoming, while controlling 38,000 miles of electric lines and 59,000 miles of gas lines.

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The firms expect the merger to enhance financial strength, improve efficiency, and expand opportunities to invest in critical energy infrastructure.

Linn Evans, Black Hills' CEO, said the transaction would "create significant long-term value" for stakeholders and strengthen the companies' ability to adapt to the ongoing energy transition. Brian Bird, CEO of NorthWestern, added that the merger would give the combined utility the scale to "accelerate investment in energy and grid infrastructure" while maintaining reliability for customers.

Under the agreement, NorthWestern shareholders will receive 0.98 shares of Black Hills for each share held, reflecting a 4% premium based on discussions since March 2025. Once finalized, Black Hills investors will own about 56% of the merged company, with Northwestern shareholders holding the remaining 44%.

The new company will nearly double its rate base to about $11.4 billion, with planned capital expenditures exceeding $7 billion between 2025 and 2029. Leadership expects the merger to boost earnings per share within the first year and raise long-term EPS growth targets to 5 to 7%, higher than either company projected independently

Upon closing, Bird will lead as CEO, with senior executives from both companies filling other top roles. The headquarters will be in Rapid City, South Dakota, while operations will be maintained throughout service territories. The merged entity will adopt a new name and ticker symbol before closing, which is expected within 12 to 15 months, pending regulatory and shareholder approvals.

The companies emphasized commitments to maintaining strong dividend policies, supporting local communities, and advancing clean energy initiatives through investments in renewables and modernized infrastructure.

Related ETFs: Utilities Select Sector SPDR Fund XLU, iShares U.S. Utilities ETF IDU.

Price Action: BKH shares were trading lower by 0.76% to $59.90, and NWE was up 3.84% at last check Tuesday.

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