Lead photo courtesy of Black Hills and NorthWestern investor presentation

Black Hills and NorthWestern Energy announced on Aug. 19 that they plan to combine, creating a $15.4 billion regulated electric and natural gas utility company.

Based in Rapid City, SD, Black Hills Corp. provides natural gas and electric utility services to 1.35 million customers across eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. Several subsidiaries operate under the name Black Hills Energy, which is used interchangeably with Black Hills Corp.

NorthWestern Energy Group provides electricity and/or natural gas to approximately 800,000 customers in Montana, South Dakota, Nebraska and Yellowstone National Park. Operations in Montana and Yellowstone are conducted through subsidiary NW Corp, while operations in South Dakota and Nebraska are through NWE Public Service. The company has served South Dakota and Nebraska since 1923 and Montana since 2002.

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Post-merger, Black Hills shareholders will own approximately 56% of the combined company, which will be headquartered in Rapid City, SD and led by NorthWestern CEO Brian Bird.

Under the all-stock agreement, NorthWestern shareholders will receive 0.98 Black Hills shares for each NorthWestern share held. Based on this exchange ratio, NorthWestern’s equity is valued at $3.6 billion, according to Reuters.

The combined company will serve 2.1 million customers across eight states in the Midwest and Rocky Mountain regions.

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The merger is projected to increase earnings per share in the first year of the combined company and support long-term EPS growth of 5% to 7%, compared to the 4% to 6% range previously projected by each company, according to the company’s investor presentation.

The companies had planned $7.4 billion in capital investments through 2029 and stated that the merger could create additional growth opportunities.

“Our future success will be driven equally by the people, assets, and capabilities of both organizations,” Black Hills Corp. President and CEO Linn Evans said in the release. “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.”

NorthWestern Energy President and CEO Brian Bird added, “Our merger with Black Hills will create a premier regional regulated utility company with a larger, more resilient platform consistent with mid-cap peers. Together, we will be better positioned to meet rising demand, accelerate investment in energy and grid infrastructure, and support customers and communities through a rapidly evolving energy landscape.”

Following the announcement, NorthWestern shares rose 6.3% to $58.39, while Black Hills shares increased by 1.1%.