Great Plains Energy Inc. agreed to buy Westar Energy Inc., the biggest utility in Kansas, for $8.6 billion as power companies across the U.S., facing weak demand and rising operational costs, look to consolidate.
Great Plains will pay $51 per share in cash and $9 per share in stock, and will assume $3.6 billion in Westar’s debt, the companies said Tuesday in a statement. Great Plains Chief Executive Officer Terry Bassham will become chairman and CEO of the combined company, while Westar CEO Mark Ruelle will remain in his current role until the deal closes, which is expected in the spring of 2017.
Goldman Sachs Group Inc., which is advising Great Plains, will provide about $8 billion of debt financing for the deal, according to the statement. Guggenheim Securities is serving as Westar’s adviser.
The transaction comes amid a boom in utility mergers and acquisitions as customers using more energy-efficient appliances and resources such as rooftop solar flatten electricity demand. There were more than $52 billion worth of utility deals pending or completed across the U.S. last year, the most since 2011, data compiled by Bloomberg show.
Read more: Bloomberg