Westar Energy and Great Plains Energy Ask KCC to Approve Merger of Equals; Missouri Filling to be Submitted by August 31

Press Release

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TOPEKA, KS and KANSAS CITY, MO – Westar Energy, Inc. (NYSE: WR) and Great Plains Energy Incorporated (NYSE: GXP) today asked the Kansas Corporation Commission (KCC) to approve their proposed merger. The neighboring utilities intend to apply for Missouri Public Service Commission (MPSC) approval by Aug. 31. The revised transaction is a stock-for-stock merger of equals that would create a new company serving 1.6 million customers with a combined equity value of approximately $14 billion.
“The KCC recognized the unique value of bringing Westar and Great Plains together. We appreciate the opportunity to present this new merger of equals for their consideration,” said Mark Ruelle, president and chief executive officer of Westar Energy. “Our customers will have a stronger company with less pressure on prices. Our shareholders will see a dividend increase and opportunity for long-term growth.”
The companies announced their intent to pursue a new transaction on July 10. Filing applications with the KCC, MPSC and other regulators formalizes the companies’ request for approvals for Great Plains Energy and Westar Energy to merge to form a new holding company, which will operate regulated electric utilities in Kansas and Missouri. Operating headquarters will be in both Topeka, Kansas, and Kansas City, Missouri. Corporate headquarters will be in Kansas City, Missouri.
“This merger unlocks savings and financial benefits for our customers, shareholders, communities, and employees,” said Terry Bassham, chairman, president and chief executive officer of Great Plains Energy. “We carefully listened to the KCC’s concerns with our original transaction and crafted a new merger agreement using the KCC’s earlier order for guidance to bring better value to customers and shareholders of both utilities compared with remaining stand alone. We look forward to working with the KCC, MPSC and other stakeholders as we seek approval.”
For the past year, the companies have been planning their combination and have identified initial savings of about $28 million in 2018, growing to $160 million per year by 2022. While the merger savings will be reflected in future electricity rates, the companies also propose $50 million in customer bill credits to retail customers in both Missouri and Kansas soon after the merger closes.
The merger better positions the companies to invest in programs and infrastructure to maintain and potentially improve customer service with less impact on prices. The companies’ have committed to maintaining community charitable contributions and to no involuntary job losses resulting from the merger.
With no cash premium paid and no transaction debt, the new company is expected to remain financially strong, aiding its ability to provide reliable service to customers and attractive returns to shareholders. The size created by merging should improve access to capital markets and leverage with suppliers, providing future savings for customers.
Great Plains and Westar anticipate filing their merger application with the Federal Energy Regulatory Commission (FERC) and the Nuclear Regulatory Commission (NRC) before the end of August. The companies expect to have necessary approvals in the first half of next year.
On July 10, the companies announced that both companies’ boards of directors unanimously approved a revised transaction that involves no control premium, no transaction debt, no exchange of cash, and is a stock-for-stock merger of equals. Recognizing the stock price differences in the exchange, Westar shareholders will exchange their shares on a ratio of 1 WR share for 1 share of the new company; Great Plains shareholders will exchange their shares on a ratio of 1 GXP shares for 0.5981 share of the new company. The new, combined company will provide electric utility service to approximately 1 million Kansas customers and nearly 600,000 customers in Missouri. The combined company will have a new name, yet to be established. Read the full announcement.
About Westar Energy
As Kansas’ largest electric utility, Westar Energy, Inc. (NYSE:WR) provides customers the safe, reliable electricity needed to power their businesses and homes. Half the electricity supplied to the company’s 700,000 customers comes from emissions-free sources – nuclear, wind and solar - with a third coming from renewables. Westar is a leader in electric transmission in Kansas, coordinating a network of lines and substations that support one of the largest consolidations of wind energy in the nation. For more information about Westar Energy, visit www.WestarEnergy.com.
About Great Plains Energy
Headquartered in Kansas City, Mo., Great Plains Energy Incorporated (NYSE: GXP) is the holding company of Kansas City Power & Light Company and KCP&L Greater Missouri Operations Company, two of the leading regulated providers of electricity in the Midwest. Kansas City Power & Light Company and KCP&L Greater Missouri Operations Company use KCP&L as a brand name.