DULUTH, Minn. — Allete, the parent company of Minnesota Power and Superior, Water, Light and Power, announced Monday the company has agreed to be acquired by a partnership between the Canada Pension Plan Investment Board and Global Infrastructure Partners.
The sale price was announced at $6.2 billion, or $67 per share. The stock had been priced at $64.47 before trading opened Monday.
The sale comes months after speculation first surfaced on Wall Street that Allete officials had been searching for a suitor.
Allete officials said the company, which would go from publicly traded to a privately owned firm, will remain headquartered in Duluth, retain its workforce, and honor all union contracts and labor agreements. Allete CEO Bethany Owen will also remain at the helm.
In an interview with the Duluth News Tribune on Monday, Owen said taking the company private would help it access “capital ready to deploy” for nearly $4 billion in clean energy and infrastructure projects planned over the next five years. She noted it takes time to raise capital in the public markets, which are volatile.
“We’re looking to double the size of Allete over the next five years,” Owen said. “And when you think about that amount of capital that we needed to have access to, we wanted to make sure that we had ready access to that. And these partners, they’re incredibly well-resourced, very well-respected. They’re not operators — they’re truly investors — and they provide us that access to capital that we need to execute our strategy.”
The CPP Investments is a professional investment management organization that manages a fund for the more than 22 million contributors and beneficiaries of the Canada Pension Plan. It has more than $590 billion (Canadian) in assets.
New York City-based GIP is among the world’s largest infrastructure investors, with approximately $112 billion in assets under management, annual revenues of approximately $73 billion, and over 115,000 employees.
In January, BlackRock, the world’s largest asset manager, agreed to buy GIP for $12.5 billion, Reuters reported. The deal is expected to close in the third quarter of 2024, BlackRock said at the time.
“We don’t believe it will mean anything for our transaction,” Owen told the News Tribune, noting it’s a separate transaction.
Allete’s board of directors unanimously approved CPP Investments’ and GIP’s acquisition of Allete, which is expected to close in mid-2025. However, it is subject to approval by Allete shareholders and regulatory agencies, including the Federal Energy Regulatory Commission and Minnesota Public Utilities Commission, as well as other customary financial closing conditions.
The Minnesota Power and Superior, Water, Light and Power subsidiaries of Allete would remain regulated utilities in Minnesota and Wisconsin. In addition to the two local utilities, Allete also owns several wind-generating, hydropower-generating, electrical transmission lines and other energy assets. The company has focused in recent years on transitioning away from coal-fired power plants to a mix of hydro, wind, solar and gas-power electrical generation.
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