Scottish Power Overcomes Regulatory Objections in Bid to Acquire PacifiCorp

Scottish Power is on the brink of a major breakthrough in its attempt to become the first British electricity company to buy a large US power supplier, PacifiCorp. After overcoming objections from regulatory officials in Oregon, the UK group is now expected to announce the details of its discussions with the Oregon Public Utility Commission. The commission will hear evidence from supporters and opponents of the offer before making its final decision in the autumn.

Key Takeaways:

• Scottish Power has overcome objections from regulatory officials in Oregon to its £3.8bn all-share offer for PacifiCorp.
• Regulatory staff in all six states where PacifiCorp operates have recommended approval or conditional approval of the offer.
• The US Federal Energy Regulatory Commission and the Department of Trade and Industry have already approved the merger.
• Officials at the Oregon Public Utility Commission had initially recommended rejecting the offer, but have since reversed their opinion after negotiations with Scottish Power.
• The UK group plans to establish a holding company to reassure regulators that the finances of each company will be separate and there will be no cross-subsidies.
• Scottish Power expects to spend £65m on bank fees and other expenses to persuade investors and regulatory authorities to approve the deal.

Statistics:

• The proposed acquisition is valued at £3.8bn.
• PacifiCorp operates in six states, with the Oregon Public Utility Commission's approval being crucial for the deal to succeed.
• Scottish Power plans to spend £65m on bank fees and other expenses.
• Regulatory staff in Utah have recommended that electricity price rises be limited to no more than increases in general inflation for up to three years.
• The Oregon Public Utility Commission is expected to make its final decision in the autumn.

Sources:

• Financial Times Limited 1999.