Innergex to be acquired by CDPQ in C$10bn renewable energy deal

Innergex Renewable Energy Inc. has entered into a definitive agreement to be acquired by Caisse de dépôt et placement du Québec (CDPQ) in a transaction valued at approximately C$10 billion. This move will transition Innergex into a privately held company, providing enhanced financial stability and long-term strategic backing to accelerate its renewable energy growth.

The deal offers Innergex’s common shareholders C$13.75 per share in cash, representing a 58% premium over its last closing price of C$8.71 and an 80% premium over its 30-day volume-weighted average price. Preferred shareholders will receive C$25.00 per share in cash, along with accrued and unpaid dividends. The transaction is expected to close by the fourth quarter of 2025, pending shareholder and regulatory approvals.

Innergex’s board of directors has unanimously approved the transaction, emphasizing the benefits of certainty of value, immediate liquidity, and stronger financial support from CDPQ. Hydro-Québec, which holds 19.9% of Innergex’s common shares, has committed to voting in favor of the acquisition.

Why Is CDPQ Acquiring Innergex?

CDPQ, a global investment firm managing pension and insurance assets, has been a long-standing investor in Innergex, with its first stake dating back to 1995. Over the years, CDPQ has progressively increased its involvement, recognizing Innergex’s leadership in clean energy projects. The acquisition aligns with CDPQ’s strategy of investing in sustainable infrastructure, ensuring long-term returns while contributing to the global transition to renewable energy.

Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at CDPQ, emphasized that Innergex’s expertise in hydro, wind, and solar power makes it a key player in Québec’s energy sector. He noted that CDPQ’s investment will provide Innergex with capital to expand operations while maintaining its headquarters in Longueuil, reinforcing Québec’s role as a leader in clean energy projects.

How Will Innergex Benefit from Going Private?

Innergex, which currently operates 90 renewable energy facilities across Canada, the United States, France, and Chile, has been steadily growing its strategic investment deals in the sector. The company manages a net installed capacity of 3,707 MW, with an additional 945 MW under development, including six projects currently under construction.

By transitioning to private ownership under CDPQ, Innergex gains financial flexibility to pursue larger projects without the constraints of quarterly earnings reports and public market volatility. This move allows the company to focus on long-term infrastructure investments, ensuring the continued expansion of renewable energy growth initiatives.

Innergex’s President and CEO, Michel Letellier, highlighted that the acquisition will enable the company to leverage CDPQ’s financial resources and expertise while preserving its commitment to sustainability, Indigenous partnerships, and long-term value creation. He reassured stakeholders that Innergex’s core mission of providing clean, reliable energy remains unchanged.

What Are the Key Financial Terms of the Deal?

Under the agreement, Innergex shareholders will receive cash compensation, providing certainty of value and immediate liquidity. The C$10 billion valuation includes Innergex’s outstanding debt, which CDPQ plans to repay as part of the transaction. The firm has already secured a fully underwritten C$1.2 billion senior bank facility to help finance the acquisition.

Preferred shareholders, particularly those holding Series A and Series C preferred shares, will be repaid at C$25.00 per share, including accrued and unpaid dividends. For Series A preferred shareholders, an additional amount will be provided to compensate for dividends payable until January 15, 2026, given that the shares cannot be redeemed before that date.

CDPQ has also stated that it intends to syndicate up to 20% of its investment to other institutional investors who share its vision for Innergex’s future. However, the completion of the acquisition is not dependent on securing co-investors, ensuring that the transaction moves forward as planned.

What Are the Next Steps for Shareholders and Regulators?

The deal is subject to approval by Innergex’s common shareholders, requiring at least two-thirds of votes cast at the upcoming shareholder meeting. Additionally, Series A preferred shareholders will need to approve the acquisition of their shares by a two-thirds majority vote. If approval is not obtained for the preferred shares, those shares will remain outstanding under their current terms.

Regulatory clearance is also required, with CDPQ and Innergex working closely with Canadian authorities to ensure compliance with investment and energy sector regulations. The companies expect the deal to receive all necessary approvals by the end of 2025.

Once the acquisition is finalized, Innergex will delist from the Toronto Stock Exchange (TSX), and CDPQ intends to apply for deregistration as a public issuer under Canadian securities laws.

What Impact Will the Deal Have on Innergex’s Operations?

Despite the ownership change, Innergex’s leadership team will remain in place, with President and CEO Michel Letellier and Chief Financial Officer Jean Trudel continuing to guide the company’s strategic direction. Both executives have committed to rolling a portion of their shares into the privatized company, investing at least C$15 million in the new entity.

Innergex will maintain its existing workforce, partnerships, and operational structure, ensuring continuity in ongoing and future clean energy projects. The privatization will allow the company to expand its portfolio without short-term market pressures, positioning it for long-term growth in renewable energy.

What Are the Broader Implications for the Renewable Energy Market?

CDPQ’s acquisition of Innergex is part of a broader trend of large institutional investors focusing on sustainable energy assets. With governments worldwide implementing net-zero targets and green energy incentives, firms like CDPQ are increasingly turning to renewable energy growth opportunities for long-term returns.

Innergex’s ability to develop, acquire, and operate large-scale renewable projects makes it a valuable asset in the global shift towards clean energy. The acquisition secures long-term funding for Innergex’s expansion, ensuring it remains competitive in the evolving energy landscape.

As demand for clean energy projects grows, Innergex is expected to play a key role in delivering hydro, wind, and solar power solutions across multiple markets. With CDPQ’s backing, the company is now positioned to lead the next phase of renewable energy development in North America and beyond.

A Milestone for Innergex and Québec’s Energy Sector

The C$10 billion acquisition of Innergex by CDPQ marks a transformational moment for the renewable energy sector. The deal not only provides immediate financial benefits to shareholders but also strengthens Innergex’s ability to scale its clean energy initiatives.

With strategic investment deals and long-term financial support, Innergex can now expand its renewable energy portfolio without the constraints of public market volatility. As the company moves into its next chapter under CDPQ’s ownership, its mission to drive sustainable energy development remains unchanged, ensuring continued innovation in hydroelectric, wind, solar, and battery storage solutions.