American Electric Power (AEP) and Algonquin Power & Utilities have mutually agreed to terminate the agreement related to the acquisition of AEP’s Kentucky operations.
In October 2021, AEP agreed to sell its Kentucky operations to Liberty Utilities, a subsidiary of Algonquin, for an enterprise value of $2.8bn.
The Kentucky operations include Kentucky Power and AEP Kentucky Transmission.
The agreement follows a strategic review of the Kentucky operations, including a potential sale, and a competitive process as part of the review, said AEP.
Algonquin said that after careful consideration, amid evolving macro environment, continuing with the proposed transaction is not in the best interest of the company.
AQN president and CEO Arun Banskota said: “We, therefore, engaged with AEP and mutually agreed to terminate the transaction.
“I would like to thank the teams who have worked tirelessly throughout this entire process.
“Looking forward, AQN remains supported by a high-quality asset base, a strong balance sheet, and is well-positioned to deliver sustainable, long-term growth, capitalise on the energy transition and create value for shareholders.”
Established in 1919, Kentucky Power serves around 165,000 electricity customers in 20 eastern Kentucky counties.
AEP Kentucky Transco is a regulated transmission business with assets located exclusively in Kentucky.
AEP assured that it will provide reliable service to Kentucky customers and ensure the financial health of the utility as part of the state’s economic and energy future.
The company said that it is taking quick and decisive action for short-term goals and developing a long-term strategy to support the goals of the Kentucky Commission.
AEP president and chief executive officer Julie Sloat said: “As a partner in Eastern Kentucky for more than 100 years, we’re renewing our focus on bringing opportunities to the region and supporting the communities we serve.
“We are working diligently to reimagine our strategy with the goal of not just supporting Kentucky but being an essential part of its economic and energy future.
“We believe there are opportunities ahead for our Kentucky operations, and we will focus our efforts on economic development, reliability and controlling cost impacts to customers.”
