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Investing.com -- Black Hills Corp . (NYSE:BKH) stock fell 3.6% to $58.20 in premarket trading Tuesday after announcing an all-stock merger with NorthWestern Energy Group (NASDAQ:NWE).
The deal, unanimously approved by both companies’ boards, will create a regional regulated utility with a combined market capitalization of approximately $7.8 billion and enterprise value of $15.4 billion. NorthWestern shares were halted ahead of the announcement after closing at $54.93 on Monday.
Under the terms of the agreement, NorthWestern shareholders will receive 0.98 shares of Black Hills for each NorthWestern share, representing a 4% premium based on volume-weighted average prices since merger discussions began in March 2025. Upon completion, Black Hills shareholders will own approximately 56% of the combined company, with NorthWestern shareholders owning the remaining 44%.
The merger is expected to be accretive to each company’s earnings per share in the first year after closing, with the combined entity targeting a long-term EPS growth rate of 5-7%, higher than either company’s standalone projections.
"The combined company will have greater scale and financial strength to consistently deliver for customers across our service territories and invest at the pace and scale that today’s energy transformation demands," said Black Hills President and CEO Linn Evans.
The new utility will serve approximately 2.1 million customers across eight contiguous states with a combined rate base of approximately $11.4 billion. The companies’ current investment plans from 2025 to 2029 exceed $7 billion.
Following the transaction’s close, NorthWestern’s Brian Bird will serve as CEO of the combined company, which will be headquartered in Rapid City, South Dakota. The merger is expected to close in 12-15 months, pending shareholder and regulatory approvals.
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