Essential Utilities Inc., one of the largest publicly traded water, wastewater and natural gas providers in the United States, announced Monday the $4.275 billion acquisition of Peoples, a natural gas distribution company based in Pittsburgh.
In addition to the all-cash transaction purchase of the company, Essential Utilities, formerly Aqua America, will also include the assumption of more than $1.1 billion of debt.
Essential also closed the previously announced $750 million investment from the Canada Pension Plan Investment Board, which acquired roughly 21.7 million shares of Essential’s common stock through the transaction.
“Today marks the beginning of an exciting new chapter in our combined companies’ histories,” Essential Chairman and CEO Christopher Franklin said. “Together, we are poised to play an important role in solving our nation’s water and natural gas infrastructure challenges through thoughtful capital investment, operational excellence, environmental stewardship and a commitment to strengthening local communities. The closing of the transaction is good news for Aqua and Peoples customers, who will benefit from our more than 260 years of combined expertise and service.”
The acquisition received regulatory approval from the Pennsylvania Public Utility Commission on Jan. 16 and includes a commitment from Essential to provide $23 million in rate credits for customers. The one-time rate credit will be available for Pennsylvania customers of both Aqua Pennsylvania and Peoples.
“We will proudly commit the necessary capital to increase the pace of gas main replacement which will ultimately result in continued safety and reliability for our customers, Franklin said.
“The accelerated gas main replacement program will also improve the environment as we reduce methane emissions from old pipes that may be leaking. This work will be achieved following the highest safety standards and utilizing union labor.”
Essential has committed to no job loss at any of its utilities as a result of the acquisition.
“Our increased need for employees and contractors to complete this work will bring even more jobs to the region,” Franklin said. “This work represents significant value potential for our shareholders and creates meaningful opportunities for career growth for the more than 3,000 industry professionals in our organization.”
The combined company will maintain its interest and efforts concerning issues related to environmental, social and governance matters, Essential said in its statement.