UPDATE: 12:50 PM August 19 — While no major layoffs are expected, some operational overlaps will be addressed through attrition. The merged company will be based in Rapid City, South Dakota, with Montana as its largest market.
CEO Brian Bird called it a historic day, emphasizing enhanced efficiency in customer service. The merger awaits approval from federal and state regulators.
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BUTTE — Black Hills Corp. (NYSE: BKH) and NorthWestern Energy Group, Inc. (Nasdaq: NWE), doing business as NorthWestern Energy, announced Tuesday a definitive agreement to merge in an all-stock, tax-free transaction that will create a premier regional regulated electric and natural gas utility company.
The boards of directors of both companies unanimously approved the merger. Based on closing stock prices as of August 18, 2025, the combined company will have a pro forma market capitalization of approximately $7.8 billion and a total enterprise value of $15.4 billion.
The new utility will serve around 2.1 million customers across eight contiguous states — Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming — and will operate roughly 38,000 miles of electric lines, 59,000 miles of natural gas pipelines, and own 2.9 gigawatts of generation capacity powered by thermal, hydro, and wind.
Leadership Praise and Strategic Vision
“We are excited to bring our two highly complementary companies together to create significant long-term value for customers, employees, shareholders, and the communities we serve,” said Linn Evans, President and CEO of Black Hills Corp. “Our future success will be driven equally by the people, assets, and capabilities of both organizations.”
“Our vision is to be the energy partner of choice,” Evans added. “This merger will accelerate our ability to achieve this goal.”
Brian Bird, President and CEO of NorthWestern Energy, said the merger “will create a premier regional regulated utility company with a larger, more resilient platform consistent with mid-cap peers.”
“Together, we will be better positioned to meet rising demand, accelerate investment in energy and grid infrastructure, and support customers and communities through a rapidly evolving energy landscape,” Bird said. “We will remain a trusted energy partner to our customers and look forward to building a brighter future for the people, businesses, and communities we are privileged to serve.”
Transaction Terms
Under the agreement, NorthWestern shareholders will receive a fixed exchange ratio of 0.98 shares of Black Hills for each NorthWestern share they own. This represents an approximate 4% premium, based on the companies’ volume-weighted average stock prices since discussions began in March 2025.
At closing, Black Hills shareholders will own approximately 56% of the new company, and NorthWestern shareholders will own approximately 44% on a fully diluted basis. Black Hills shareholders will retain the same number of shares they held prior to the merger.
Financial and Strategic Rationale
The combined company is positioned as a pure-play, regulated, vertically integrated utility with diverse customers and fuel sources. Executives say the merger will increase scale, drive operational efficiencies, and strengthen financial resilience.
Key points include:
- Doubling of rate base to approximately $11.4 billion, split between electric ($7.0 billion) and natural gas ($4.4 billion).
- Over $7 billion in planned investments from 2025 to 2029, with additional opportunities expected after the merger.
- Expected EPS accretion for both companies in the first year after close.
- Long-term EPS growth target of 5% to 7%, an increase from each company’s standalone expectations.
- No single state jurisdiction will represent more than 33% of revenue, providing regulatory diversification.
- Continued strong investment-grade credit profile, with access to capital to fund growth and infrastructure projects.
Leadership, Governance, and Structure
Upon closing, the new company’s executive team will include:
- Brian Bird (NorthWestern) – Chief Executive Officer
- Marne Jones (Black Hills) – Chief Operating Officer
- Crystal Lail (NorthWestern) – Chief Financial Officer
- Kimberly Nooney (Black Hills) – Chief Integration Officer
Linn Evans will remain CEO of Black Hills until the merger is complete, at which point he will retire.
The 11-member board of directors will include six directors from Black Hills and five from NorthWestern, including Bird and Linda Sullivan, current chair of the NorthWestern board. Steven Mills, chair of the Black Hills board, will chair the combined company’s board.
The merged utility will be headquartered in Rapid City, South Dakota, and will retain a strong operational presence throughout its service territory. A new name and ticker symbol will be announced before closing. For now, the companies will continue operating under the Black Hills Energy and NorthWestern Energy brands.
Timing and Approvals
The merger is expected to close in 12 to 15 months, pending:
- Shareholder approvals from both companies,
- Regulatory approvals from commissions in Montana, Nebraska, and South Dakota (and Arkansas if required),
- Federal Energy Regulatory Commission approval, and
- Clearance under the Hart-Scott-Rodino Antitrust Improvements Act.
Conference Call
The companies hosted a joint investor call Tuesday morning at 6:30 a.m. MDT / 8:30 a.m. EDT to discuss the transaction. A replay and presentation slides will be available for one year at:
🔗 www.BlackHillsNorthWesternBetterTogether.com
