WGL Holdings, Inc. to be Acquired by AltaGas Ltd. in $6.4 Billion Transaction
WGL Holdings, Inc. strengthens its position as a leading North
American provider of natural gas, electricity, green power and energy
WGL Holdings, Inc. will maintain the headquarters of its U.S. utility
business, Washington Gas, in Washington, D.C., as it has for almost
170 years, while also assisting in the management of AltaGas Ltd.'s
U.S. regulated utility business
AltaGas Ltd. also intends to relocate the headquarters of its U.S.
power business to WGL Holdings Inc.'s service region
The transaction price of $88.25 per share recognizes the value of WGL
Holdings Inc.'s long term growth plan and appropriately rewards its
The WGL Holdings, Inc.'s family of companies will continue to function
as before, maintaining employee staffing and existing investment
programs - under the same company names and brand
The combined company will have an ability to target high growth
markets and enhance its clean energy offering to customers, while
maintaining reliable and affordable utility service with local rates
no higher as a result of the transaction
The combined company is expected to have an enterprise value of
approximately $17 billion and approximately $3.4 billion in natural
gas rate base assets
WGL Holdings, Inc. (NYSE: WGL) (WGL) and AltaGas Ltd. (TSX: ALA)
(AltaGas) today announced that the Boards of Directors of both companies
have unanimously approved a definitive agreement and plan of merger for
WGL to be acquired by AltaGas in an all cash transaction for
approximately $6.4 billion in cash.
"This is a significant and positive event for WGL, and our customers,
employees, communities and shareholders," said Terry McCallister,
Chairman and CEO of WGL. "Our leadership team and Board of Directors are
convinced that we have found exactly the right partner in AltaGas. We
are confident that, together, we will be a more diverse and stronger
company that will open up new and exciting opportunities to provide
value for all of our stakeholders."
"We look forward to welcoming WGL employees and customers to AltaGas,"
said David Harris, President and CEO of AltaGas. "This acquisition
provides us with a robust, complementary set of business segments that
greatly increase our scale and diversity. Our first priority in making
this successful is to continue serving WGL's customers and communities
with safe, reliable and affordable service and maintaining the strong
relationships WGL has built with regulators."
AltaGas is a leading North American diversified energy infrastructure
company with a focus on natural gas, power and regulated utilities.
AltaGas creates value by acquiring, growing and optimizing its energy
infrastructure, with a focus on clean energy sources.
As a result of the transaction, the WGL family of companies and their
employees will become part of a larger, more broad-based, multinational
organization. WGL will maintain its utility headquarters in Washington
D.C. and continue to manage its regulated utility business, while also
assisting in the management of AltaGas' U.S. regulated utility business.
AltaGas also intends to relocate the headquarters of its U.S. power
business to WGL's service region.
Including WGL, the new company will have its operations and assets in
the United States and Canada. These efforts will not only allow WGL to
maintain its significant presence in the Washington, D.C., metropolitan
area, but will also incorporate AltaGas into the community. As such, WGL
and AltaGas look forward to continuing to provide their customers with
excellent service. WGL will also increase its substantial level of
community involvement and charitable giving.
Following the closing of the transaction, WGL's natural gas utility will
continue to be regulated by commissions in the District of Columbia,
Maryland, and Virginia, and operate under the Washington Gas brand.
WGL's experienced workforce will continue delivering high quality
service to its customers at reasonable rates.
WGL strengthens commitment to customers and the
Washington metropolitan area; expands its North American footprint and
WGL will now be part of a new business entity that is approximately
double its current size with a broader and complementary set of energy
businesses. This increase in scale and diversity of businesses will
allow WGL to continue to grow through a larger and more geographically
WGL will benefit from AltaGas' complementary focus on building a
diversified mix of gas, power and utility assets to provide clean and
affordable energy to its customers. Both companies have similar visions
and are underpinned by strong growth in domestic natural gas supply and
the growing demand for clean and renewable energy.
Mr. McCallister said, "We are proud of our company and are enthusiastic
about our combination with AltaGas. Our focus at WGL has been creating
value for our shareholders, while at the same time providing excellent
service to our customers and to the communities we serve. This
transaction not only allows our shareholders to benefit from a
substantial premium on their shares, but it also ensures our customers
and communities will continue to receive the same great service we have
provided for decades. AltaGas shares our values, including maintaining
strong working relationships we have developed with all our
stakeholders. The WGL team looks forward to contributing to the combined
company's future and the opportunities for growth across the
"The strategic fit and compatibility of our two companies is
exceptional. Both companies are strong utility operators, have a sweet
spot of pipeline and midstream investments in premier supply basins, and
have power and distributed generation businesses weighted to clean
energy and innovations," said Mr. Harris. "With WGL joining the AltaGas
family of companies, AltaGas' business will enjoy a larger, more stable
and geographically diverse regulated footprint. We can also deploy
capital for future growth in all lines of business with greater scope,
scale, talent, access to capital and consistent strategy. For our
shareholders, the transaction is expected to be meaningfully accretive
to earnings and operating cash flow in the short and long term."
Under the terms of the Transaction, WGL shareholders will receive US
$88.25 in cash per WGL share, which represents a premium of 27.9% to
WGL's closing share price on November 28, 2016, the day prior to news
reports of a potential acquisition of WGL by a third party.
The Boards of Directors of WGL and AltaGas have unanimously approved the
transaction, which is expected to close in the second quarter of 2018.
Consummation of the transaction is subject to certain closing
conditions, including WGL common shareholder approval, and approvals
required from the Public Service Commission of the District of Columbia,
the Maryland Public Service Commission and the Virginia State
Corporation Commission. WGL and AltaGas also plan to submit the
transaction for review by the Committee on Foreign Investment in the
United States. The agreement will also be subject to Federal Regulatory
Energy Commission approval, and expiration or termination of any
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.
For further details, please see the press release issued by AltaGas
contemporaneously with this release.
Analyst and Investor Teleconference Call
AltaGas will be hosting a conference call and webcast on Wednesday,
January 25, 2017 at 5:00 PM Eastern Standard Time (Toronto/Montreal/New
York) or 3:00 PM Mountain time.
Analysts and investors in North America wanting to participate in the
call should dial 1-844-543-5238 at least 10 minutes prior to the start
of the call. International participants wanting to participate should
dial 1-703-318-2220. No pass code is required. The conference call will
be recorded. If you are unable to join the conference call live, you can
dial for playback, toll-free at 1-855-859-2056. International
participants wanting to listen to the playback can dial 1-404-537-3406.
The passcode is 60526169 (available until midnight, January 27, 2017).
Presentation slides for the conference call will be available and the
teleconference will be web cast live at http://edge.media-server.com/m/p/2khbbiz9
and available for playback for one year.
Media Teleconference Call
Members of the media are invited to take part in a conference call on
Wednesday, January 25, 5:45 PM Eastern Standard Time
(Toronto/Montreal/New York) or 3:45 PM Mountain time. Media wanting to
participate in the call should dial 1-877-691-2551, passcode 44242733,
at least 5 minutes prior to the start of the call. Canadian participants
wanting to participate should dial 1-866-215-5508, passcode 44242733.
All other international participants wanted to participate should
1-630-691-2747, passcode 44242733. The teleconference will be recorded
and a transcript will be available.
Goldman, Sachs & Co. and Lazard are acting as financial advisors to WGL.
Kirkland & Ellis LLP is acting as merger counsel and Covington & Burling
LLP is acting as CFIUS counsel to WGL.
J.P. Morgan Securities LLC is acting as lead financial advisor and TD
Securities is acting as financial advisor to AltaGas. Vinson & Elkins
LLP is acting as lead legal advisor and Stikeman Elliott LLP is acting
as legal advisor to AltaGas.
WGL (NYSE: WGL), headquartered in Washington, D.C., is a leading source
for clean, efficient and diverse energy solutions. With activities and
assets across the U.S., WGL consists of Washington Gas, WGL Energy
Services, WGL Energy Systems, WGL Midstream and Hampshire Gas. WGL
provides natural gas, electricity, green power and energy services,
including generation, storage, transportation, distribution, supply and
efficiency. Our calling as a company is to make energy surprisingly easy
for our employees, our community and all our customers. Whether you are
a homeowner or renter, small business or multinational corporation,
state and local or federal agency, WGL is here to provide Energy
Answers. Ask Us. For more information, visit us at www.wgl.com.
AltaGas (TSX: ALA) is an energy infrastructure business with a focus on
natural gas, power and regulated utilities. AltaGas creates value by
acquiring, growing and optimizing its energy infrastructure, including a
focus on clean energy sources. For more information, visit: www.altagas.ca.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in respect
of the proposed merger transaction. WGL Holdings, Inc. ("WGL") intends
to file with the U.S. Securities and Exchange Commission (the "SEC") and
mail to its shareholders a proxy statement in connection with the
proposed merger transaction. THE INVESTORS AND SECURITY HOLDERS OF WGL
ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS
WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION about AltaGas, Ltd. ("AltaGas"), WGL and the proposed merger
transaction. Investors and security holders will be able to obtain these
materials (when they are available) and other documents filed with the
SEC free of charge at the SEC's website, www.sec.gov.
In addition, a copy of WGL's proxy statement (when it becomes available)
may be obtained free of charge upon request by contacting WGL Holdings,
Inc., Leslie T. Thornton, Corporate Secretary, 101 Constitution Avenue
N.W., Washington, District of Columbia, 20080. WGL's filings with the
SEC are also available on WGL's website at: http://wglholdings.com/sec.cfm.
Investors and security holders may also read and copy any reports,
statements and other information filed by WGL with the SEC, at the SEC
public reference room at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 or visit the SEC's website for
further information on its public reference room.
Participants in the Solicitation
AltaGas, WGL and certain of their respective directors, executive
officers and other persons may be deemed to be participants in the
solicitation of proxies in respect of the proposed merger transaction.
Information regarding AltaGas' directors and executive officers is
available in AltaGas' Management Information Circular, filed on March
17, 2016 (in English and French) with the Canadian Securities
Administrators (the "CSA") and in AltaGas' Annual Information Form,
filed on March 23, 2016 (in English) and March 24, 2016 (in French) with
the CSA, each of which are available at: www.sedar.com.
Information regarding WGL's directors and executive officers is
available in WGL's proxy statement filed with the SEC on December 23,
2016 in connection with its 2017 annual meeting of shareholders, and its
Annual Report on Form 10-K for the fiscal year ended September 30, 2016,
each of which may be obtained from the sources indicated in Additional
Information and Where to Find It. Other information regarding
persons who may be deemed participants in the proxy solicitation and a
description of their direct and indirect interests (which may be
different than those of WGL's investors and security holders), by
security holdings or otherwise, will be contained in the proxy statement
and other relevant materials filed or to be filed with the SEC when they
This document contains forward-looking statements related to the
business combination between WGL and AltaGas, including statements
regarding the benefits and timing of the transaction as well as
statements regarding WGL's products, services and markets. Forward
looking statements are predictions, projections and other statements
about future events that are based on current expectations and
assumptions and, as a result, are subject to risks and uncertainties.
Many factors could cause actual future events to differ materially from
the forward-looking statements in this document, including the
following, among others: closing of the transaction may not occur or may
be delayed; WGL stockholders may not approve the transaction; litigation
related to the transaction or limitations or restrictions imposed by
regulatory authorities may delay or negatively impact the transaction
and there may be a loss of customers, employees or business partners as
a result of the transaction. In addition, please refer to the documents
that WGL files with the SEC on Forms 10-K, 10-Q and 8-K. These filings
identify and address other important risks and uncertainties that could
cause events and results to differ materially from those contained in
the forward-looking statements set forth in this document. Readers are
cautioned not to put undue reliance on forward-looking statements, and
WGL assumes no obligation and does not intend to update these
forward-looking statements, whether as a result of new information,
future events or otherwise.
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WGL Holdings, Inc.
Source: WGL Holdings, Inc.
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