NextEra's Hawaiian Electric Bid Rejected, Merger Called Off
Zacks Investment Research | Jul 17, 2016 09:44PM ET
NextEra Energy, Inc.’s (NYSE:NEE) proposed takeover of Hawaiian Electric Industries, Inc. (NYSE:HE) has been rejected by regulatory authorities, after nearly two years of its initial filing. The rejection has lead the parties to call off the merger.
Details of the Ruling
The Hawaiian Public Utilities Commission (HPUC) has rejected the $4.3 billion acquisition citing ambiguities related to NextEra Energy’s commitment to support Hawaiian Electric’s target of 100% green energy in the island chain.
We remind investors that Hawaiian Electric set an ambitious target of installing smart grids, smart meters and converting cars to run on electricity to benefit consumers as well as to conserve the environment.
NextEra Energy failed to outline a clear plan of action to benefit ratepayers as well as to help in the eventual conversion to renewable energy in the Hawaiian island. Instead, it was only focused on utilizing its technical expertise and economies of scale to transition into a bigger utility.
Further, the loss of local control of the island’s biggest utility and NextEra Energy’s complex corporate structure posed concerns, as NextEra Energy had offered no steps to mitigate the impact of its structure on ratepayers.
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