REGIONAL— Officials with Duluth-based ALLETE Inc., the parent company of Minnesota Power, announced this week that they have agreed to be acquired by a partnership led by the Canada Pension Plan Investment Board and Global Infrastructure Partners.
The deal, estimated at $6.2 billion including assumption of debt, according to an ALLETE press release, would take the assets currently controlled by the publicly traded company private.
Under the deal, the partnership will acquire all outstanding ALLETE common stock for $67 per share, a premium of nearly 12 percent over the closing share price on April 30 of this year. The ALLETE board of directors unanimously approved the deal and is expected to close in mid-2025, subject to the approval of shareholders and regulators.
The Canada Pension Plan Investment Board, which goes by the acronym CPP Investments, is a Canadian Crown corporation created in 1997 to oversee and invest the funds within the Canada Pension Plan. The firm currently has nearly $600 billion in assets under management.
U.S.-based Global Infrastructure Partners, or GIP, is a private equity firm founded in 2006 that specializes in investments in infrastructure. The company, headed by Adebayo Ogunlesi, was acquired by the investment behemoth BlackRock earlier this year for a reported $12.5 billion.
According to the press statement, the sale of ALLETE will not impact the company’s workforce, union agreements, or its commitment to a clean energy future. The company will remain locally managed and operated from its headquarters in Duluth.
“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, with continuity of our day-to-day operations, strategy and shared purpose and values,” said ALLETE Chair, President, and Chief Executive Officer Bethany Owen.
“CPP Investments and GIP have a successful track record of long-term partnerships with infrastructure businesses, and they recognize the important role our ALLETE companies serve in our communities as well as our nation’s energy future.”
According to ALLETE, CPP Investments and Global Investment Partners have made several commitments as part of the deal, including:
• Retaining workforce: The agreement commits to retaining workforce as well as compensation levels and benefits programs. It also honors union contracts, including with the International Brotherhood of Electrical Workers.
• Maintaining the current headquarters and leadership: ALLETE’s Minnesota Power and Superior Water, Light and Power will continue as independently operated, locally managed, regulated utilities. Bethany Owen will continue as Chief Executive Officer, and the current management team will continue to lead ALLETE and remain as the primary points of contact for customers, regulators and other stakeholders.
• Contributing to community: ALLETE and its family of businesses and the Minnesota Power Foundation will continue to make economic and charitable contributions in its service territories to support vibrant and sustainable communities, close opportunity gaps, and help people of all ages live with purpose and passion.
In addition, the transaction will support existing commitments made by ALLETE such as:
• ALLETE’s clean-energy goals: All ALLETE companies will remain committed to advancing a clean-energy future, through solar, wind, storage and transmission infrastructure and achieving carbon-free goals of the respective states in which the companies operate.
• Retail or municipal rates for utility customers: Following the close of the acquisition, ALLETE’s utilities will continue to be regulated by the Minnesota Public Utilities Commission and other state and federal regulators.
The acquisition is not expected to impact retail or municipal rates for utility customers, which includes Minnesota Power customers in Tower-Soudan and parts of Lake Vermilion as well as customers of Ely public utilities, which purchase electricity from Minnesota Power on contract.