Wisconsin Energy Buys Integrys In $5.7 Billion Deal

Wisconsin Energy, the largest utility company in Wisconsin, merged with Integrys, an energy company headquartered in Chicago, Ill., Monday in a $5.7 billion deal.

The new company will be called the WEC Energy Group Inc., and serve more than 4.3 million gas and electric customers in Wisconsin, Minnesota, Michigan and Illinois. According to Bloomberg Businessweek, this is the largest deal this year behind Exelon Corp.’s $6.8 merger with Pepco Holdings Inc.

The Chicago Sun Times reports that Integrys will own 28 percent of the company. “The company’s shares surged $9.95, or 16.3 percent, to $70.90 in premarket trading about two hours ahead of the market open,” the Sun Times reported.

Headquarters will remain in Milwaukee, Wis., although operating headquarters will be located in Chicago and Green Bay.

In an interview, analyst for BCP Partners LP Kit Konolige spoke positively about the merger. “We’ve had a lot of utility mergers for slightly different reasons,” Konolige said. “There are significant operating and financial efficiencies that you can get from combining somewhat smaller companies into a larger one.”

Analyst for Morningstar, Inc. Charles Fishman also believes the merger to be in Integrys’ favor. Two hours before the market open, Integrys’ shares rose 16.3 percent.

“It’s a real healthy premium and they’re getting shares in a very solid company,” Fishman said.

The deal is expected to close at the end of summer 2015. Wisconsin Energy CEO Gale Klappa will retain his office as head of the combined company.

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