Minnesota regulators approve ALLETE’s $200 million acquisition deal

DULUTH, Minn. - The Minnesota Public Utilities Commission (MPUC) unanimously approved ALLETE, Inc.’s (NYSE:ALE) acquisition by Canada Pension Plan Investment Board and Global Infrastructure Partners, securing the final regulatory approval needed for the transaction expected to close in late 2025. The utility company, currently valued at $3.9 billion, has shown strong financial stability with its stock trading near its 52-week high. According to InvestingPro data, ALLETE has maintained dividend payments for an impressive 55 consecutive years, demonstrating long-term stability for investors.

The approved deal includes approximately $200 million in customer benefits for Minnesota Power customers and various commitments to support affordable energy rates, clean energy initiatives, and local governance. The company’s solid financial position is reflected in its healthy current ratio of 1.34, indicating strong ability to meet short-term obligations. For deeper insights into ALLETE’s financial health and valuation metrics, investors can access comprehensive analysis through InvestingPro, which offers exclusive access to over 30 key financial metrics and expert insights.

"Today’s decision caps a comprehensive public process and positions ALLETE well to meet the significant infrastructure demands of the clean-energy transition without compromising the high-quality service and commitments to reliability and affordability," said ALLETE Chair, President and CEO Bethany Owen in a press release statement.

The agreement includes a one-year base rate freeze, $50 million in rate credits, a $10 million fund for energy efficiency initiatives, and up to $3.5 million in residential customer arrearage forgiveness for eligible low-income customers.

The deal also features a guaranteed access to capital for ALLETE’s five-year plan advancing transmission and renewable energy goals, and a $50 million Clean Firm Technology Fund to support regional clean-energy projects.

ALLETE will maintain its headquarters in Duluth with the current leadership team in place. The company has committed to retain its current workforce, honor union contracts, and maintain compensation and benefits programs.

The transaction has already received approvals from ALLETE shareholders, the Federal Energy Regulatory Commission, and the Public Service Commission of Wisconsin. Upon closing, ALLETE’s shares will no longer trade on the New York Stock Exchange, though Minnesota Power and Superior Water, Light and Power will remain public utilities regulated by their respective state commissions.

The agreement was supported by the Minnesota Department of Commerce, clean-energy organizations, business leaders, labor unions, and advocates for low-income residents. With a beta of 0.82, ALLETE has historically demonstrated lower volatility compared to the broader market. InvestingPro subscribers can access detailed research reports and additional ProTips that provide comprehensive analysis of ALLETE’s market position and future prospects.

In other recent news, ALLETE, Inc. has received support from the Minnesota Department of Commerce regarding its proposed acquisition by the Canada Pension Plan Investment Board and Global Infrastructure Partners. The department has deemed the acquisition to be in the public interest and has recommended its approval to the Minnesota Public Utilities Commission. As part of the agreement, several customer benefits have been outlined, including a one-year base rate freeze for Minnesota Power customers. Additionally, there will be a reduction in ALLETE’s Return on Equity from 9.78% to 9.65% until a future rate case is addressed. These developments are part of ongoing efforts to ensure that the acquisition proceeds smoothly, with consideration for customer impacts.

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