Thursday, February 16, 2017

Department of Justice Completes Review of Westar Energy Sale

Last summer, the U.S. Department of Justice requested information from Westar Energy (WR) and Great Plains Energy (GXP). DOJ was reviewing Great Plains' proposed $12 billion acquisition of Westar Energy to make sure it complies with antitrust laws.
A Great Plains official says the U.S. Department of Justice and the Federal Trade Commission completed their reviews of the proposed sale of Westar to Great Plains.
"Both agencies have completed their reviews and determined it was not necessary to take any further action," said Courtney Hughley, corporate communications manager with KCP&L, which is owned by Great Plains. "We’re still on track with our approval process and expected to close in the spring of 2017."
Hughley said the Department of Justice "routinely reviews large mergers and acquisitions in the electric power industry from a competitive standpoint. In many industries, transaction parties file under the Hart-Scott-Rodino (HSR) Act with the antitrust agencies immediately after signing a deal. In the case of large utility mergers, however, given the time typically required to obtain other regulatory approvals and the fact that the HSR filing goes “stale” after one year, the parties will often delay their HSR filings. This is what Great Plains and Westar have done. In our case, the DOJ chose to commence its antitrust review soon after the deal was announced rather than wait for the parties to file HSR. In October, the FTC and DOJ granted KCP&L and Westar early termination for the HSR waiting period."
Stock in Westar Energy (WR) has fallen 8% since the sale of Westar was announced last spring. The stock suffered recently after a week-long hearing in front of the Kansas Corporation Commission. KCC staff recommended against the sale.
KCC will decide the fate of the merger by April 24.

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