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SNC-Lavalin on Friday announced it has entered into a binding agreement to sell 100 % of its interest in AltaLink, Alberta's largest regulated electricity transmission company, to Berkshire Hathaway Energy.
Based on the terms of the agreement and assuming a December 31, 2014 closing date, gross proceeds to SNC-Lavalin from the sale will be approximately C$3.2 billion.
The sale of AltaLink represents another significant step in the execution of the SNC-Lavalin's Strategic Plan. Announced in May 2013, SNC-Lavalin's Strategic Plan involves actively managing its portfolio of infrastructure concession investments to unlock and create value that supports its future growth as a Tier-1 services provider in key engineering and construction (E&C) markets.
Robert G. Card, President and Chief Executive Officer, SNC-Lavalin Group Inc., said:
"After a robust process that drew considerable interest, we are very pleased to announce a transaction that recognizes significant value for AltaLink--a unique regulated asset in a high-growth electricity market--while also providing for a continued relationship with SNC-Lavalin. I would like to thank AltaLink's employees, who have helped make their company so successful. I know they will have a bright future and benefit from enhanced career opportunities as part of Berkshire Hathaway Energy. The sale of AltaLink will help us build value for our company by providing opportunities to advance our E&C growth strategy. The use of capital will be determined based on the best long-term interests of SNC-Lavalin."
Gerry Grigoropoulos, Acting Executive Vice-President, Infrastructure Concession Investments (ICI), SNC-Lavalin Group Inc., said:
"Our excellent relationship over the past decade with AltaLink allowed us to develop an outstanding asset, while growing our engineering and construction team and maintaining strong expertise in the transmission and distribution of energy--a sector in which we aspire to be a global leader. As such, this agreement is a successful example of our ICI strategy, which focuses on maximizing the synergies between our asset management expertise and project capabilities to create value for our company and its shareholders."
SNC-Lavalin and MidAmerican Transmission, a subsidiary of Berkshire Hathaway Energy, have also mutually agreed to develop engineering, procurement and construction opportunities in the US and Canada within independent system operators and regional transmission organizations. Through the agreement, the parties will look to emerging transmission investment opportunities in these countries. The agreement combines the engineering and construction management strengths of SNC-Lavalin with the strong track record of MidAmerican Transmission on joint transmission projects with other entities.
Completion of the sale is subject to customary regulatory approvals, including approval by the Alberta Utilities Commission and approvals pursuant to the Competition Act and Investment Canada Act.
Berkshire Hathaway Energy owns a portfolio of locally managed businesses that share a vision for the energy future, make sustainable investments to achieve that vision, and had $70 billion of assets as of Dec. 31, 2013.
Founded in 2002, AltaLink is Canada's only fully independent transmission company. It maintains and operates approximately 12,000 kilometres of transmission lines and 280 substations in Alberta. AltaLink also owns more than half of Alberta's transmission grid and delivers electricity to approximately 85 percent of the province's population's.