Great Plains Energy to buy Westar for $8.6 billion

Westar Energy (KSN file photo)

KANSAS CITY, Mo. (KSNW) – Great Plains Energy , the parent company of Kansas City Power & Light , will buy rival Westar Energy in a $8.6 billion dollar deal.

According to the Great Plains Energy website, the enterprise value of the deal is about $12.2 billion, including about $3.6 billion in Westar’s debt.

After the deal closes, Westar will be a wholly owned subsidiary of Great Plains Energy.

“Our commitment to reliability, customer satisfaction, safety and sustainability is consistent with Great Plains Energy’s values, which makes them our ideal partner. We’re eager to join the Great Plains Energy team, and excited about this new chapter that combines the unique strengths of our respective organizations to form an even stronger company for our state,”  said Mark Ruelle, president and chief executive officer of Westar.

Westar shareholders will receive a total of $60 per share, representing a premium of 13.4 percent to the stock’s Friday close.

The transaction will increase Great Plains Energy’s customer base to more than 1.5 million in Kansas and Missouri, with nearly 13,000 megawatts of generation capacity.

“This is an important transaction for Kansas and our entire region. By combining our two companies, we are keeping ownership local and management responsive to regulators, customers and regional needs, while enhancing our ability to build long-term value for shareholders,” Terry Bassham, chairman and chief executive officer of Great Plains Energy and KCP&L, said.

In addition, Great Plains Energy says more than 45 percent of the combined utility’s retail customer demand can be met with emission-free energy.

Great Plains Energy has secured about $8 billion of committed debt financing from Goldman Sachs.

Goldman Sachs & Co. is Great Plains Energy’s financial adviser for the deal and Bracewell LLP is its legal adviser.

Guggenheim Securities LLC is Westar’s financial adviser and Baker Botts LLP is its legal counsel.

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