Duluth electric utility owner Allete sold for $6.2 billion
A Canadian pension board and a New York-based investment firm have agreed to purchase Allete, the parent company of Duluth-based utility Minnesota Power, for $6.2 billion.
The partnership paid $67 per share to acquire Allete and plans to take the company private, pending approval from shareholders and regulators. Allete officials said the company will maintain local management and keep its headquarters in Duluth.
Minnesota Power serves about 150,000 customers across northeastern Minnesota, including several taconite mines and processing plants, which are some of the largest industrial electric customers in the country.
Twenty years ago the utility generated virtually all its electricity from coal. Today more than 50 percent of its generation comes from carbon-free sources, including wind, solar and hydropower.
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Allete also owns two clean energy companies, a North Dakota coal mine, and the Superior Water, Light and Power utility in Wisconsin.
Canada Pension Plan Investment Board manages a fund for 22 million contributors and beneficiaries, and Global Infrastructure Partners, which manages $112 billion in assets in energy and other sectors.
“CPP Investments and GIP have a successful track record of long-term partnerships with infrastructure businesses, and they recognize the important role our ALLETE companies serve in our communities as well as our nation’s energy future,” said Allete CEO Bethany Owen in a statement announcing the deal. Owen will remain as CEO of the company.
In an interview, she said the sale provides access to the capital Allete needs to continue its transition to carbon-free electricity.
“We’re looking at more than $4 billion of investments over just the next five years in the clean energy transition,” Owen said. “And these partners have that access to capital.”
In its statement, the company said it will honor agreements with unions, and that the agreement “contains meaningful commitments” to retain Allete’s workforce, along with compensation levels and benefits.
The acquisition is scheduled to close by mid-2025.