Electric and Gas Utility Mergers and Acquisitions: Structuring Deals, Navigating Regulatory Scrutiny

The utility industry is experiencing a push toward consolidation and mergers and acquisitions are changing the industry landscape. Utilities involved in the consolidation process must be able to deal with numerous regulatory complexities and myriad contractual provisions in order to negotiate and close transactions. Counsel to the utilities will need to negotiate key agreement provisions regarding regulatory approvals, damages, breach, closing conditions and more.

When considering utility mergers, regulators have historically used the public interest standard of review. The factors vary by state for regulators in this review. Recently, however, regulators have considered whether the proposed merger will result in additional benefits or risks to the customers.

Another trend in utility mergers and acquisitions is the use of reverse break-up fees in deals. The use of these fees provides an incentive to the parties to obtain the necessary regulatory approvals to close the deal.

Listen as our authoritative panel discusses structuring deals in the utility industry and the increased regulatory scrutiny that companies are facing. The panel will discuss regulatory review (HSR, FERC, utility regulatory commissions) and regulatory commitments. The panel will also examine the standard of review and how that standard has evolved as the industry has consolidated.

1. Structuring deals
   1. Key provisions
   2. Valuation
   3. Reverse break-up fees
2. Regulatory scrutiny
   1. Standard of review
   2. Regulatory commitments
   3. Regulatory approval

The panel will review these and other key issues:

• What steps should counsel take to secure regulatory approval for a utility deal?
• What remedies are available if one of the parties breaches the agreement?
• What are best practices to avoid common pitfalls in structuring a utility merger or acquisition?