Louisiana residents should be interested to know that the Federal Energy Regulatory Commission has finally approved Louisiana-based Cleco Corporation’s proposition to be acquired by various infrastructure investors such as Macquarie Infrastructure and Real Assets, and John Hancock Financial.
The acquisition offer was formally proposed late last year in October, which valued the Louisiana-based utility company at about $4.7 billion even after factoring in roughly $1.3 billion of the utility company’s outstanding debt and liabilities. Both the company’s shareholders and the Committee on Foreign Investment in the U.S had already approved the acquisition.
Assuming that the Louisiana Public Service Commission (LPSC) will also approve the transaction, Cleco expects it to close later this year. Once the transaction is closed, Cleco Power LLC will remain under the LPSC and FERC’s regulatory jurisdiction.
Utility companies as of late have been ever increasingly signaling their interest in taking part in merger and acquisition transactions to help cope with ever shrinking profit margins spurred on lowered sales numbers. Additionally, utility companies have also had to deal with increasing costs that they continue to incur as they meet new environmental regulations that go into effect, resulting in cuts into their bottom line.
Mergers and acquisitions and the related regulatory approvals can get complex very quickly. Businesses interested in growing are likely aware that regulatory scrutiny is part of any deal. To ensure that all aspects of the deal are carefully evaluated and addressed, including requests from regulators, becomes paramount in any business merger deal. Having a business law firm familiar with the Louisiana market and industry by one’s side during such transactions is not only important for success but also crucial.
Source: Zacks, “Cleco Gets FERC Approval for Takeover by Investor Group,” July 21, 2015