Avista and Ontario-based Hydro One terminated their merger agreement Jan. 23, after the boards of each company approved the action.
As required by the agreement, Hydro One will pay Avista a $103 million termination fee.
The decision to terminate the deal follows recent orders by the Washington UTC and the Idaho PUC rejecting the merger, the former finding the transaction was “not consistent with the public interest,” and the latter finding it would violate Idaho state law.
The companies said in a statement that they opted to halt merger efforts after “careful consideration and analysis of the likelihood of achieving a timely reversal of those orders.”
Launched in July 2017, the proposed $5.3 billion deal began to unravel after the ouster of Hydro One’s CEO and board of directors following elections in June that changed the majority control of the Ontario government. This disruption was despite earlier assurances by Hydro that Ontario, a 47-percent shareholder, was a passive investor that would not exert political pressure on the company.
The companies had originally expected final orders in late August, but Washington, Oregon and Idaho regulators extended proceedings to at least December after the Ontario tumult.
In the face of this, Avista and Hydro One on Sept. 19 exercised contract terms to extend the end date by up to six months, changing it from Sept. 30, 2018, to March 29, 2019, saying at the time that they “continue to expect to close the transaction in the fourth quarter of 2018.”