New York-based KKR and Canada's Public Sector Pension Investment Board have formed a 50/50 partnership that will buy a 19.9 percent interest in American Electric Power’s Ohio and Indiana & Michigan transmission companies for $2.82 billion.
Columbus-based AEP serves 5.6 million retail and wholesale customers across 11 states, with Ohio, Indiana and Michigan among its fastest-growing service territories.
“We are thrilled to strategically partner with the best-in-class leader in transmission in the U.S., and are impressed with AEP’s deep operational capabilities, highly experienced leadership team, and its history of innovation,” KKR Managing Director Kathleen Lawler said in a statement. “KKR’s infrastructure business has a long track record of investing behind the energy transition and electrification opportunities, and this investment in AEP sits squarely at the intersection of these two trends. The simplicity and stability of the assets, coupled with the robust demand for electricity, make AEP’s transmission assets an ideal investment for KKR.”
“We are pleased to launch this strategic partnership with two of the world’s premier global infrastructure investors," AEP CEO Bill Fehrman said in a statement. "KKR and PSP are experienced investors in the utilities and energy space with a proven track record of successful infrastructure investments. This transaction allows AEP to efficiently finance a growing segment of our business and enhances our ability to serve growing customer demand and provide reliable service to our customers.”
AEP will remain the majority owner and operator of the transmission companies.
