Black Hills, NorthWestern Energy Agree to $15.4 Billion All-Stock Utility Merger

Black Hills Corp. (NYSE: BKH) and NorthWestern Energy Group (Nasdaq: NWE) have agreed to merge in an all-stock, tax-free deal that will create a $7.8 billion market-cap regulated utility, serving 2.1 million customers across eight states.

Black Hills Corp. and NorthWestern Energy Group, Inc. announced Tuesday that their boards have unanimously approved an all-stock, tax-free merger designed to create a larger, vertically integrated regulated utility with a combined market capitalization of $7.8 billion and enterprise value of $15.4 billion, based on closing share prices as of August 18, 2025.

Under the agreement, NorthWestern shareholders will receive 0.98 Black Hills shares for each of their own, representing a modest 4% premium to recent averages. Post-closing, Black Hills shareholders will own about 56% of the new company, with NorthWestern shareholders holding 44%. The merged entity will adopt a new name and ticker symbol, with headquarters in Rapid City, South Dakota.

Strategic Rationale

The deal creates a pure-play regulated utility serving 2.1 million electric and gas customers across Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming. Combined, the companies will manage 38,000 miles of electric lines, 59,000 miles of natural gas pipelines, and nearly 2.9 GW of owned generation fueled by thermal, wind, and hydro resources.

The merger doubles the companies’ collective rate base to $11.4 billion, including $7 billion in electric assets and $4.4 billion in natural gas. Capital investment plans exceeding $7 billion from 2025 to 2029 are expected to grow further under the expanded platform, with particular focus on grid modernization, new generation capacity, and infrastructure to meet rising power demand from data centers and industrial growth.

The companies emphasized their diversified regulatory footprint, with no single jurisdiction representing more than 33% of operations. Executives expect the enlarged scale to support a 5%–7% long-term EPS growth rate, higher than each could achieve independently, and to deliver EPS accretion within the first year post-merger.

Leadership and Governance

Upon closing, NorthWestern CEO Brian Bird will take the helm of the combined company, while Black Hills’ Linn Evans will remain CEO until retirement at deal completion. Other key appointments include Marne Jones (COO, Black Hills), Crystal Lail (CFO, NorthWestern), and Kimberly Nooney (Chief Integration Officer, Black Hills).

The board of directors will comprise 11 members, six designated by Black Hills and five by NorthWestern, including Bird and current NorthWestern chair Linda Sullivan. Black Hills chair Steven Mills will serve as board chair of the merged utility.

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Dividend and Financial Profile

Both companies intend to maintain current dividend policies until closing. Following completion, management expects to adopt a dividend policy balancing shareholder returns, capital investment, and debt discipline, underpinned by investment-grade credit ratings and robust cash flows.

Sector Context

The merger reflects a broader wave of utility sector consolidation aimed at building scale to finance capital-intensive energy transition initiatives and grid modernization. Rising demand from electrification, data centers, and regulatory decarbonization mandates have accelerated utility M&A in the U.S., particularly among mid-cap regulated players seeking resilience and stronger balance sheets.

Approvals and Timing

The transaction is slated to close within 12 to 15 months, subject to shareholder approval, antitrust clearance under the Hart-Scott-Rodino Act, and regulatory approvals in Montana, Nebraska, South Dakota, and potentially Arkansas, along with clearance from the Federal Energy Regulatory Commission (FERC).

Advisors

Goldman Sachs advised Black Hills, with Faegre Drinker Biddle & Reath LLP as counsel. Greenhill, a Mizuho affiliate, advised NorthWestern, alongside Morgan, Lewis & Bockius LLP.

If approved, the merger will unite two century-old utilities into a stronger regional player positioned to fund clean energy investments, modernize infrastructure, and maintain reliable, cost-competitive service for millions of Midwestern and Rocky Mountain customers.

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