Black Hills Corp. and NorthWestern Energy Group announced the signing of a definitive all-stock merger agreement, unanimously approved by both boards of directors. The new entity resulting from this tax-free transaction will have a market capitalization of approximately $7.8 billion and a combined enterprise value estimated at $15.4 billion, based on closing prices as of August 18, 2025.
The merger aims to create a major regional operator in regulated electricity and natural gas distribution services, serving approximately 2.1 million customers across eight U.S. states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming. The combined entity will operate approximately 38,000 miles of power lines, nearly 2.9 gigawatts of owned generation capacity (thermal, hydroelectric, and wind sources), and 59,000 miles of natural gas pipelines.
A Strengthened Portfolio and Expanded Investment Potential
The merger doubles the combined rate base to $11.4 billion, including $7 billion for electricity operations and $4.4 billion for natural gas. The current investment plan, covering the period 2025–2029, exceeds $7 billion. This capital will be primarily directed toward critical infrastructure to meet growing demand, especially in expanding areas such as those hosting data centers.
Executives from both companies anticipate an increase in investment opportunities following the merger, thanks to a broader regional presence and operational synergies. No regulatory jurisdiction will account for more than 33% of the group’s operations, offering a balanced regulatory profile.
Immediate Financial Impact and Enhanced Credit Profile
The transaction, which features a fixed exchange ratio of 0.98 Black Hills shares for each NorthWestern share, includes a premium of approximately 4% over the volume-weighted average prices since March 2025. Upon completion of the merger, Black Hills shareholders will own approximately 56% of the new entity’s capital, and NorthWestern shareholders will hold 44%.
The merger is presented as accretive to the earnings per share (EPS) of both companies starting in the first year after closing. The combined company targets a long-term EPS growth rate of 5% to 7%, higher than those of the individual entities. It will also benefit from predictable cash flows and improved access to capital—factors expected to maintain a high-quality credit profile.
Governance, Integration, and Dividend Outlook
The new organization’s leadership team will include executives from both companies: Brian Bird (NorthWestern) will become CEO, Marne Jones (Black Hills) will lead operations, Crystal Lail (NorthWestern) will serve as Chief Financial Officer, and Kimberly Nooney (Black Hills) will oversee integration.
An 11-member board of directors will be formed, with a majority designated by Black Hills. The headquarters will be located in Rapid City, South Dakota, and the future entity will adopt a new name and stock symbol, yet to be determined. The operating subsidiaries will retain their current names at the close of the transaction.
The dividend strategy is expected to remain unchanged until closing. Afterward, a new policy will be defined, aiming to balance shareholder returns, investments, and balance sheet strength.
An Integrated Platform to Meet Growing Demand
By pooling their assets and expertise, the two companies plan a gradual optimization of processes, systems, and operations. This consolidation is expected to support infrastructure investments while maintaining competitive rates.
With an experienced leadership team and skilled workforce, the merged company aims to remain attractive to talent and maintain a strong local presence. It also plans to continue its community commitments and contributions to the areas it serves.
