Utilities Black Hills, NorthWestern Energy to merge in all-stock deal

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Black Hills (NYSE:BKH [https://seekingalpha.com/symbol/BKH]) and NorthWestern Energy (NASDAQ:NWE [https://seekingalpha.com/symbol/NWE]) said Tuesday they agreed to an all-stock, tax-free merger [https://seekingalpha.com/pr/20204605-black-hills-corp-and-northwestern-energy-to-combine-in-all-stock-merger-to-create-a-premier] that will create a regional regulated electric and natural gas utility company with a combined enterprise value of $15.4B.

Under the deal terms, NorthWestern (NASDAQ:NWE [https://seekingalpha.com/symbol/NWE]) shareholders will receive a fixed exchange ratio of 0.98 shares of Black Hills (NYSE:BKH [https://seekingalpha.com/symbol/BKH]) for each share of NorthWestern they own at the close of the transaction; the exchange ratio implies a ~4% premium based on the volume weighted average price of each company's common stock since the two companies began discussing transaction terms in March 2025.

Upon completion of the merger, Black Hills (NYSE:BKH [https://seekingalpha.com/symbol/BKH]) shareholders will own 56% and NorthWestern (NASDAQ:NWE [https://seekingalpha.com/symbol/NWE]) shareholders will own 44% of the combined company on a fully diluted basis.

The combined company will serve ~2.1M customers across eight contiguous states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming.

Combined, the companies' current investment plans during 2025-29 exceed $7B and will be focused on building new electric and natural gas critical infrastructure.

The companies also said the merged entity supports a long-term target EPS growth rate of 5%-7%, greater than both Black Hills (BKH [https://seekingalpha.com/symbol/BKH]) and NorthWestern (NWE [https://seekingalpha.com/symbol/NWE]) on a standalone basis.

MORE ON BLACK HILLS AND NORTHWESTERN ENERGY

* Black Hills Corp. Is Just Getting Started [https://seekingalpha.com/article/4814300-black-hills-corp-is-just-getting-started]
* Why I Am Upranking Black Hills Corporation From Hold To Buy [https://seekingalpha.com/article/4807374-why-upranking-black-hills-stock-from-hold-to-buy-q2-earnings]
* NorthWestern Energy: Stability, Yield And The New Data Center Catalyst [https://seekingalpha.com/article/4800410-northwestern-energy-stability-yield-new-data-center-catalyst]