By Ross Kerber
(Reuters) – The Minnesota Public Utility Commission on Friday endorsed a substantial $6.2 billion acquisition proposal involving a unit of BlackRock and the Canada Pension Plan to take over Allete, which owns Minnesota Power, highlighting that the latest adjustments by the parties should alleviate worries regarding electricity rates and investments in clean energy.
The unanimous 5-0 vote from the commission is likely to give investors confidence that BlackRock can navigate regulatory and antitrust challenges as its Global Infrastructure Partners unit—acquired last year—seeks further acquisitions.
Earlier this week, sources indicated that the infrastructure division was engaged in discussions to acquire the utility firm AES. In a related development on Friday, two sources confirmed that talks were underway for the unit to purchase a data center entity supported by Macquarie.
Company leaders stated that the Minnesota acquisition, first revealed last year, is intended to facilitate Allete’s shift toward renewable energy resources.
Some critics, including the Sierra Club, business stakeholders, and State Attorney General Keith Ellison, expressed concerns that this agreement might result in increased rates and questioned whether Minnesota Power would be able to meet the state’s goal of achieving carbon-free electricity by 2040.
During the meeting, which was streamed online, the commissioners remarked that the recent updates helped alleviate their initial hesitations regarding the deal. A submission from the involved companies indicated that the modified terms would provide up to $258 million in benefits for utility stakeholders, including via a clean technology fund and consumer bill credits.
Commissioner Hwikwon Ham expressed his newfound confidence in the deal due to these adjustments, noting that the commission retains the authority to review the company’s rates if there are any issues.
Commission Chair Katie Sieben emphasized that Minnesota Power requires substantial investments for projects, such as a new transmission line necessary for importing hydropower from Manitoba.
In a filing with the securities regulators, executives from BlackRock and the Canada Pension Plan Investment Board commended the commission’s decision and announced that all required regulatory approvals have now been obtained, with the transition process expected to conclude by late 2025.
“We are dedicated to maintaining Allete’s strong community commitment as it continues providing safe, reliable, and increasingly carbon-free energy to Northeastern Minnesota,” noted Jonathan Bram, founding partner of Global Infrastructure Partners, in the filing.
Some organizations, including the Private Equity Stakeholder Project and the Sierra Club, continued to voice opposition to the decision, raising issues about rate stability and expressing uncertainty over whether the investors would fund initiatives for cleaner energy.
(Reporting by Ross Kerber; Editing by Edmund Klamann)
