Spokane, WA-based Avista Corp. and Canada-based Hydro One Ltd. on Wednesday pulled the plug on their 18-month effort to complete the Toronto electricity giant's $5.3 billion takeover proposal.
Regulators in two of the Pacific Northwest states in which Avista's combination utilities operate -- Washington and Idaho -- rejected the deal, and leaders of the two companies decided there was little hope those denials could be reversed.
Under the terms of the deal, natural gas and power distributor Avista is to be paid a $103 million termination fee by the Canadian electric transmission and distribution provider. Hydro One has more than C$25 billion in assets and generates C$6 billion in annual revenues.
It was clear last month that the Washington Utilities and Transportation Commission (UTC) found too many negative risks in the deal, especially considering that midway into the regulatory review process Ontario political leadership changed, causing the resignation of the Hydro One board and retirement of its CEO. This had negative financial impacts on the quasi-private utility in which the province holds 47% of the stock.
As a result, the UTC concluded that the proposed merger did not provide a net benefit to Avista customers, nor did it protect them from political or financial risk
While the two organizations' CEOs expressed disappointment, they both noted that their individual companies would remain formidable by staying independent. Avista CEO Scott Morris called his company a "strong, vibrant and independent utility" of 130 years standing, and Hydro One's Paul Dobson said his firm remained focused on "delivering safe and reliable power."