HOME > News

NextEra Energy and Hawaiian Electric Industries Terminate Merger

published: 2016-07-19 18:04

Hawaii Public Utilities Commission (PUC) announced the rejection to merger between NextEra Energy and Hawaiian Electric Industries (HEI) on July 15. After the order, NextEra Energy and HEI announced to terminate their plans to merge immediately.

"As a result of the PUC's order, we have terminated our merger agreement," said Jim Robo, chairman and chief executive officer, NextEra Energy, in a statement published jointly by NextEra Energy and HEI. "We wish Hawaiian Electric the best as it serves the current and future energy needs of Hawaii, including helping the state meet its goal of 100% renewable energy by 2045. Looking forward, NextEra Energy remains extremely well-positioned to execute on our strategy and deliver exceptional results for our customers and shareholders."

NextEra Energy shall pay HEI a US$90 million break-up fee and up to US$5 million for reimbursement of expenses associated with the transaction under terms of the merger agreement. After payment of taxes, HEI can receive the net amount of US$60 million.

HEI will continue its business as an independent company

NextEra Energy’s break-up fee and reimbursement of expenses will help HEI’s clean energy transformation, including the 2016 plan to invest approximately US$145 million into Hawaiian Electricity.

In addition, the spin-off of American Savings Bank (ASB) was contingent upon the completion of the combination of HEI with NextEra Energy. With the termination of that transaction, the spin-off of ASB is not contemplated at this time. ASB will still serve and invest in Hawaii to have more renewable energy resources.

"While the merger would have provided significant benefits for Hawaii, HEI remains a strong company that is well-positioned to achieve our goals and provide long-term value for our customers, community, employees and shareholders," said Connie Lau, HEI's president and chief executive officer and chairman of the boards of Hawaiian Electric and American Savings Bank. "At Hawaiian Electric, we will continue to transform, innovate, and execute on our vision to empower our customers and communities with affordable, reliable, clean energy.”

During 2016, HEI shows an earnings per share guidance range of US$1.62~1.75 per share, demonstrating the company’s financial and operational strength. Hence, HEI will continue to move forward as an independent company regardless of the merger termination.

HEI supplies up to 23% of energy needs from renewable resources in 2015. The renewable supplying share on Hawaii Island was even as high as 49%.

At the moment, HEI has a number of clean energy initiatives in progress, subject to regulatory approval. The initiatives include a proposal of constructing smart grids, 330MW of renewable energy projects by 2022, and energy storage integrated rooftop and utility-scale projects.

announcements add announcements     mail print