ALLETE, Inc. to be acquired by CPP Investments and GIP for $6.2bn

ALLETE, Inc., a prominent energy company known for its commitment to clean energy and reliable services, has entered into a definitive agreement for its acquisition by a partnership led by Canada Pension Plan Investment Board (CPP Investments) and Global Infrastructure Partners (GIP). The agreement stipulates a purchase price of $67.00 per share in cash, valuing ALLETE at approximately $6.2 billion, including the assumption of debt.

Strategic Implications of the Acquisition

Bethany Owen, ALLETE’s Chair, President, and CEO, expressed enthusiasm about the partnership’s potential, highlighting the alignment with ALLETE’s sustainability goals: “Through this transaction with CPP Investments and GIP, we will have access to the capital we need while keeping our customers, communities and co-workers at the forefront of all that we do,” she stated. This acquisition promises to bolster ALLETE’s efforts in driving the clean-energy transition, emphasizing renewable energy expansion and carbon reduction.

CPP Investments and GIP are globally recognized infrastructure investors with extensive experience in fostering long-term growth in large-scale infrastructure businesses. Their investment approach focuses on delivering sustainable value, which is expected to support ALLETE’s ongoing initiatives in clean and affordable energy.

Canada Pension Plan Investment Board and Global Infrastructure Partners set to acquire ALLETE, Inc. for $6.2 billion, enhancing clean-energy commitments.

Commitments and Future Outlook

The acquisition agreement includes several commitments to maintain ALLETE’s operational integrity and community engagement. ALLETE’s headquarters will remain in Duluth, Minnesota, and its existing leadership team, including CEO Bethany Owen, will continue to manage day-to-day operations. The deal also includes provisions for workforce retention and union contract honors, reinforcing ALLETE’s dedication to its employees and community partnerships.

Regulatory and Closing Conditions

The transaction is set to close in mid-2025, pending approval from ALLETE shareholders, regulatory bodies including the Minnesota Public Utilities Commission, and other customary closing conditions. The acquisition price represents a 19.1% premium over ALLETE’s closing share price prior to acquisition rumors, reflecting the strategic value of this merger in the energy sector.

Impact on Customers and Rates

Post-acquisition, ALLETE will continue to operate as a private company, focusing on enhancing its service offerings without impacting retail or municipal rates for utility customers. This stability is crucial for maintaining trust and reliability among consumers and stakeholders.

This acquisition marks a significant milestone in the energy sector, combining ALLETE’s rich history and commitment to clean energy with the strategic and financial prowess of CPP Investments and GIP. It promises to reshape the future landscape of energy provision, emphasizing sustainable growth and innovation.