Canada’s Algonquin Power & Utilities Corp. and American Electric Power have pulled the plug on the deal for AEP’s utility subsidiary Kentucky Power and its transmission business AEP Kentucky Transco.
Algonquin, through its Liberty subsidiary, agreed to acquire the businesses for an enterprise value of $2.846 billion, including about $1.221 billion of debt, in October 2021. The pair then agreed on a reduced price in September 2022, saving Algonquin $200 million.
"After careful consideration, and in light of the evolving macro environment, our Board of Directors and management team have determined that continuing with the Transaction is not in the best interest of the company. We therefore engaged with AEP and mutually agreed to terminate the transaction," said Arun Banskota, president and CEO of Algonquin.
Algonquin is an international generation, transmission and distribution utility with over $17 billion of total assets through its portfolio of long-term contracted wind, solar and hydroelectric generating.
AEP operates and maintains the largest electricity transmission system in the US, with more than 224,000 miles of distribution lines across 11 states. It is also one of the nation's largest electricity producers, with some 31GW of diverse generating capacity, including more than 7.1GW of renewable energy.
The company's plans include growing its renewable generation portfolio to approximately 50% of total capacity by 2030.
“We are working diligently to reimagine our strategy, with the goal of not just supporting Kentucky but being an essential part of its economic and energy future," said Julie Sloat, AEP president and chief executive officer. "We believe there are opportunities ahead for our Kentucky operations, and we will focus our efforts on economic development, reliability and controlling cost impacts to customers.”