Black Hills, NorthWestern Energy to combine in all-stock merger

Black Hills (BKH) and NorthWestern Energy Group (NWE) announced that each company’s board of directors has unanimously approved a definitive agreement to combine in an all-stock, tax-free merger that will create a premier regional regulated electric and natural gas utility company with a pro forma market capitalization of approximately $7.8B and a combined enterprise value of $15.4B, based on each company’s closing stock price as of August 18, 2025. Under the terms of the agreement, NorthWestern shareholders will receive a fixed exchange ratio of 0.98 shares of Black Hills for each share of NorthWestern they own at the close of the transaction. The exchange ratio implies an approximately 4% premium based on the volume weighted average price of each company’s common stock since Black Hills and NorthWestern began discussing transaction terms in March 2025. Black Hills shareholders will continue to hold the same number of shares of the combined company that they hold of Black Hills immediately prior to the closing of the transaction. Upon completion of the merger, Black Hills shareholders will own approximately 56% and NorthWestern shareholders will own approximately 44% of the combined company on a fully diluted basis. The combination will double the size of each company’s rate base to a total of approximately $11.4B, with approximately $7B and $4.4B for electric and natural gas, respectively. Combined, the companies’ current investment plans from 2025 to 2029 exceed $7B and will be focused on building new electric and natural gas critical infrastructure to meet rising energy demand and advancing energy resilience in the regions where the combined company operates, while ensuring long-term competitive rates for customers. This level of investment is expected to increase following the combination as the combined company leverages its enhanced resources to make strategic investments that foster economic development in its expansive territories, including addressing the growing demand from data centers. The combined company supports a long-term target EPS growth rate of 5% to 7%, greater than both Black Hills and NorthWestern on a standalone basis. The combination is expected to be accretive to each company’s EPS in the first year following the close of the transaction. The leadership of the combined company will reflect the strengths and capabilities of both companies. Upon closing of the transaction, Mr. Bird will serve as CEO of the combined company; Marne Jones, Black Hills Senior Vice President and Chief Utility Officer, will serve as COO Crystal Lail, NorthWestern CFO, will serve as CFO; and Kimberly Nooney, Black Hills Senior Vice President and CFO, will serve as Chief Integration Officer. Linn Evans will continue serving as CEO of Black Hills through the close of the transaction, at which point he will retire. The combined company’s 11-member board of directors will include six directors designated by Black Hills, and five directors designated by NorthWestern, including Mr. Bird and Linda Sullivan, Chair of the NorthWestern board. Steven Mills, Chair of the Black Hills board, will be Chair of the combined company’s board of directors. The combined company will have a new name and ticker symbol, to be determined prior to the close of the transaction. The operating companies are expected to maintain their current names at transaction closing. The transaction is expected to close in 12 to 15 months, subject to customary closing conditions, clearance under the Hart-Scott Rodino Act, approval from each company’s shareholders, and regulatory approvals, including approval from commissions in the three states in which both companies operate and in Arkansas if required, as well as the Federal Energy Regulatory Commission.