ScottishPower Moves Closer to Completing $4 Billion PacifiCorp Acquisition

Strategic Insights -

ScottishPower has taken a crucial step towards finalizing its $4 billion acquisition of US-based PacifiCorp, securing a recommendation for approval from Oregon's Public Utility Commission staff. The recommendation follows an agreement offering up to $51 million in price reductions, with ScottishPower committing to four years of customer credits worth $12 million to $15 million annually. This marks a significant turnaround from the commission's earlier stance, which had called for the merger's blockage due to concerns over public interest. The decision is contingent on the commission's formal approval, expected in the autumn, and is part of a broader regulatory process in several US states.

Key Takeaways:

  • ScottishPower has secured a recommendation for approval from Oregon's Public Utility Commission staff for its $4 billion acquisition of PacifiCorp.
  • The company has agreed to offer up to $51 million in price reductions, with $12 million to $15 million in customer credits annually for four years.
  • This marks a significant turnaround from the commission's earlier stance, which had called for the merger's blockage.
  • The decision is contingent on the commission's formal approval, expected in the autumn.
  • ScottishPower expects to achieve annual savings of around $200 million at PacifiCorp after the merger.
  • The acquisition is subject to approval in several US states, including Oregon, California, Wyoming, Idaho, Washington, and Utah.
  • Officials in California have already approved the merger, while those in Utah have conditionally agreed, pending no real increases in electricity prices for the first three years after the merger.

Statistics:

  • ScottishPower's acquisition of PacifiCorp is valued at $4 billion.
  • PacifiCorp had revenues of $5.6 billion last year, with around $2 billion coming from Oregon.
  • The customer credits offered by ScottishPower are worth $12 million to $15 million annually for four years.
  • The level of concessions granted by ScottishPower is relatively small compared to the overall size of PacifiCorp.

Sources:

  • [1] "ScottishPower edges closer to PacifiCorp deal with Oregon approval" - Staff Report, BBC News (no date)
  • "ScottishPower agrees to price cuts for Oregon customers in bid to win merger approval" - PAUL STOKES, Business Editor, Scottish Power
  • [3] "ScottishPower denies mishandling PacifiCorp deal to Palomar" - Staff Report, Argus Leader (no date)