CPPIB and Global Infrastructure Partners to Acquire Energy Provider Allete

The Canada Pension Plan Investment Board and Global Infrastructure Partners have entered into a deal to acquire Minnesota-based utility and energy provider Allete for $6.2 billion, the firms have announced.

The partnership will take the energy company private for $67.00 share, a 19.1% premium to its share price on December 4, 2024, when a media report announced that the company was exploring a sale.

Both CPPIB and GIP have a long history of acquiring stakes in utilities. CPPIB owns stakes in or fully owns more than a dozen utilities and energy providers in its real assets portfolio, including Maple Power, Civitas Resources, Aera Energy Services and Wolf Midstream.

Allete canceled its May 9, 2024, earnings conference call following the announcement of its acquisition on May 6.

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“Allete is at the forefront of the clean energy transition, and we are thrilled to support the delivery of the company’s ‘Sustainability-in-Action’ strategy, which we believe will generate substantial value both for Allete’s customers and CPP contributors and beneficiaries,” said James Bryce, managing director and global head of infrastructure at CPPIB.

Allete and its subsidiaries provide electricity to over 145,000 residents in the upper Midwest. Business units within Allete include;

Allete Clean Energy-which develops, acquires and manages clean and renewable energy projects;
BNI Energy-an operator of coal mines and generating stations;
Minnesota Power – which provides 50% renewable power to over 145,000 residents in Northern Minnesota;
New Energy Equity-a solar development company with more than 250 projects across 25 states; and;
Superior Water, Light & Power-an electricity, water and natural gas provider based in Wisconsin.

The deal is anticipated to close in mid-2025, pending regulatory approval and other closing conditions.

“GIP, alongside CPP Investments, look forward to partnering to provide Allete with additional capital so they can continue to decarbonize their business to benefit the customers and communities they serve,” said Bayo Ogunlesi, chairman and CEO of GIP, in a press release. “Bringing together Allete, with its demonstrated commitment to clean energy, with GIP, one of the world’s premier developers of renewable power, furthers our commitment to serve growing market needs for affordable, carbon-free and more secure sources of energy.”

CPPIB manages investments for 22 million beneficiaries in Canada. As of December 31, 2023, the fund had C$590.8 billion ($432.01 billion) in assets. Global Infrastructure Partners is one of the world’s largest infrastructure investors, with $112 billion in assets under management.