KKR and PSP Investments Acquire Minority Stake in Two American Electric Power Transmission Companies
KKR and PSP Investments have agreed to acquire a 19.9% stake in American Electric Power's (AEP) Ohio and Indiana & Michigan transmission companies for $2.82 billion. The 50/50 strategic partnership aims to support AEP's modernization of infrastructure and enhance grid reliability across its service territories.
AEP, established in 1906, serves 5.6 million retail and wholesale customers across 11 states. Ohio, Indiana, and Michigan represent AEP's fastest-growing service areas, driven by strong American manufacturing and new load growth. The investment will support AEP's five-year capital plan to benefit customers, with AEP remaining the majority owner and operator of the transmission assets.
The transaction aligns with KKR's infrastructure business focus on energy transition and electrification opportunities, while marking a significant milestone in PSP Infrastructure's High Inflation Correlated Infrastructure strategy.
KKR e PSP Investments hanno concordato di acquisire una partecipazione del 19,9% nelle compagnie di trasmissione dell'American Electric Power (AEP) in Ohio e Indiana & Michigan per $2,82 miliardi. La partnership strategica paritetica mira a supportare la modernizzazione delle infrastrutture di AEP e a migliorare l'affidabilità della rete elettrica nelle sue aree di servizio.
AEP, fondata nel 1906, serve 5,6 milioni di clienti al dettaglio e all'ingrosso in 11 stati. Ohio, Indiana e Michigan rappresentano le aree di servizio in più rapida crescita di AEP, sostenute da una forte manifattura americana e da una nuova crescita della domanda. L'investimento sosterrà il piano di capitale quinquennale di AEP a beneficio dei clienti, con AEP che rimarrà il principale proprietario e operatore delle attività di trasmissione.
La transazione è in linea con il focus di KKR nel settore delle infrastrutture, concentrandosi sulle opportunità di transizione energetica e di elettrificazione, segnando allo stesso tempo un traguardo significativo nella strategia di infrastrutture correlate all'alta inflazione di PSP Infrastructure.
KKR y PSP Investments han acordado adquirir una participación del 19,9% en las compañías de transmisión de American Electric Power (AEP) en Ohio e Indiana & Michigan por $2.82 mil millones. La asociación estratégica 50/50 tiene como objetivo apoyar la modernización de la infraestructura de AEP y mejorar la confiabilidad de la red en sus áreas de servicio.
AEP, fundada en 1906, atiende a 5.6 millones de clientes minoristas y mayoristas en 11 estados. Ohio, Indiana y Michigan representan las áreas de servicio de más rápido crecimiento de AEP, impulsadas por una sólida manufactura estadounidense y un nuevo aumento de la demanda. La inversión respaldará el plan de capital de cinco años de AEP en beneficio de los clientes, manteniendo a AEP como el principal propietario y operador de los activos de transmisión.
La transacción se alinea con el enfoque del negocio de infraestructura de KKR en oportunidades de transición energética y electrificación, marcando también un hito significativo en la estrategia de infraestructura correlacionada con alta inflación de PSP Infrastructure.
KKR과 PSP Investments가 American Electric Power(AEP)의 오하이오주와 인디애나 및 미시간 전력 송전 회사의 19.9% 지분을 28억 2천만 달러에 인수하기로 합의했습니다. 50/50의 전략적 파트너십은 AEP의 인프라 현대화를 지원하고 서비스 지역의 그리드 신뢰성을 향상시키는 것을 목표로 하고 있습니다.
1906년에 설립된 AEP는 11개 주에서 560만 명의 소매 및 도매 고객에게 서비스를 제공합니다. 오하이오, 인디애나, 미시간은 강력한 미국 제조업과 새로운 수요 증가에 힘입어 AEP의 가장 빠르게 성장하는 서비스 지역을 나타냅니다. 이번 투자는 AEP의 고객에게 혜택을 주기 위한 5년 자본 계획을 지원하며, AEP는 송전 자산의 주요 소유자이자 운영자로 남습니다.
이번 거래는 KKR의 인프라 사업이 에너지 전환 및 전기화 기회에 중점을 두고 있는 것과 일치하며, PSP 인프라의 고 인플레이션 연계 인프라 전략에서 중요한 이정표가 되는 것입니다.
KKR et PSP Investments ont convenu d'acquérir une participation de 19,9 % dans les entreprises de transmission d'American Electric Power (AEP) dans l'Ohio ainsi qu'en Indiana & Michigan pour 2,82 milliards de dollars. Ce partenariat stratégique à parts égales vise à soutenir la modernisation des infrastructures d'AEP et à améliorer la fiabilité du réseau dans ses zones de service.
AEP, fondée en 1906, dessert 5,6 millions de clients de détail et de gros dans 11 états. L'Ohio, l'Indiana et le Michigan représentent les zones de service à la croissance la plus rapide d'AEP, soutenues par une forte fabrication américaine et une nouvelle augmentation de la demande. Cet investissement soutiendra le plan d'investissement quinquennal d'AEP à l'avantage des clients, AEP restant le principal propriétaire et exploitant des actifs de transmission.
La transaction est en ligne avec l'orientation de KKR vers les opportunités de transition énergétique et d'électrification, tout en marquant une étape significative dans la stratégie d'infrastructure corrélée à la haute inflation de PSP Infrastructure.
KKR und PSP Investments haben vereinbart, eine 19,9%ige Beteiligung an den Übertragungsunternehmen von American Electric Power (AEP) in Ohio sowie Indiana & Michigan für 2,82 Milliarden Dollar zu erwerben. Die 50/50-Strategiepartnerschaft zielt darauf ab, die Modernisierung der Infrastruktur von AEP zu unterstützen und die Zuverlässigkeit des Stromnetzes in den Versorgungsgebieten zu verbessern.
AEP, die 1906 gegründet wurde, bedient 5,6 Millionen Einzel- und Großhandelskunden in 11 Bundesstaaten. Ohio, Indiana und Michigan sind die am schnellsten wachsenden Versorgungsgebiete von AEP, die durch eine starke amerikanische Fertigung und ein neues Wachstumsverständnis angetrieben werden. Die Investition wird AEPs fünfjährigen Investitionsplan unterstützen, um den Kunden zugute zu kommen, wobei AEP der Hauptbesitzer und Betreiber der Übertragungsanlagen bleibt.
Die Transaktion passt zu KKR's Infrastrukturgeschäftsstrategie, die sich auf Energi انتقال und Elektrifizierungsmöglichkeiten konzentriert, und markiert gleichzeitig einen bedeutenden Meilenstein in der Hochinflations- korrelierten Infrastrukturstrategie von PSP Infrastructure.
- Strategic acquisition of 19.9% stake in key transmission assets for $2.82 billion
- Investment supports AEP's five-year capital plan and infrastructure modernization
- Exposure to fastest-growing service territories driven by manufacturing growth
- Partnership with established utility serving 5.6 million customers across 11 states
- Defensive investment with predictable inflation-linked cash flow profile
- Minority stake position limits operational control
- Large capital commitment in regulated utility sector with potential regulatory risks
Insights
This
The investment aligns perfectly with the growing electrification trend and manufacturing reshoring movement in the Midwest. Ohio, Indiana and Michigan's manufacturing renaissance, coupled with increasing digitalization, creates a compelling growth narrative for transmission infrastructure. The regulated nature of these assets provides predictable cash flows and built-in inflation protection - important characteristics in today's economic environment.
For KKR shareholders, this represents a strategic portfolio diversification into defensive infrastructure assets with strong recession-resistant characteristics. The 50/50 partnership with PSP Investments also helps mitigate risk while maintaining meaningful exposure to the upside potential.
The timing and positioning of this investment are strategically sound. The U.S. power grid requires substantial modernization to support increasing electrification demands, with estimates suggesting
The structured minority stake approach is clever - it provides capital for AEP's expansion while allowing KKR and PSP to benefit from regulated returns without assuming operational responsibilities. The focus on transmission assets rather than generation is particularly astute, as transmission infrastructure typically enjoys more stable regulatory treatment and faces less disruption risk from emerging technologies.
For context, transmission investments typically generate returns on equity between
Investment to support modernization of infrastructure and increased reliability
Strategic partnership comes as need for reliable power soars in the
AEP is a fully regulated electric utility that serves 5.6 million retail and wholesale customers across 11 states.
“We are thrilled to strategically partner with the best-in-class leader in transmission in the
“We are delighted to form this partnership with AEP to support its ambitious growth plan to build much needed transmission infrastructure in a region that is undergoing significant tailwinds from digitalization and reshoring of critical manufacturing,” said Michael
“We are pleased to launch this strategic partnership with two of the world’s premier global infrastructure investors. KKR and PSP are experienced investors in the utilities and energy space with a proven track record of successful infrastructure investments,” said Bill Fehrman, AEP president and chief executive officer. “This transaction allows AEP to efficiently finance a growing segment of our business and enhances our ability to serve growing customer demand and provide reliable service to our customers.”
Upon the closing of the transaction, AEP will remain the majority owner and operator of the transmission assets. KKR is funding this investment from its core infrastructure strategy.
Moelis and Morgan Stanley served as financial advisors and Simpson Thacher served as legal advisor to KKR and PSP Investments.
About KKR
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group’s website at www.globalatlantic.com.
About PSP Investments
The Public Sector Pension Investment Board (PSP Investments) is one of
View source version on businesswire.com: https://www.businesswire.com/news/home/20250109303908/en/
Media:
KKR
Liidia Liuksila or Emily Cummings
(212) 750-8300
media@kkr.com
PSP Investments
Charles Bonhomme
+1 438 465-1260
media@investpsp.ca
Source: KKR
FAQ
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