KKR and PSP to Acquire AEP Transmission Stake for $2.8 Billion
KKR and PSP Investments are set to buy a minority stake in AEP’s transmission business for $2.8 billion, boosting their energy portfolio.
AEP, KKR, PSP Investments, Ohio, Indiana, Michigan, Electricity
Columbus: American Electric Power Co. is selling a minority stake in its transmission business to KKR and Canada’s PSP Investments for a whopping $2.8 billion.
These investment firms are grabbing about a 20% share in AEP’s transmission operations across Ohio, Indiana, and Michigan. They announced this deal on Thursday.
KKR and PSP are teaming up for this purchase, and they’re betting big on the growing demand for electricity in the U.S. This surge is driven by things like data centers and AI.
AEP’s CEO, Bill Fehrman, mentioned that areas like Ohio and Indiana are seeing growth levels not witnessed in decades. It’s a big deal!
With a massive transmission system stretching over 40,000 miles, AEP has the largest network in the U.S. They’re planning to use the funds from this sale to support their $54 billion spending plan over the next five years, focusing on transmission and distribution projects.
Utilities across the country are stepping up their investments as power demand continues to rise. Earlier this year, FirstEnergy Corp. sold a 30% stake in its transmission unit for $3.5 billion.
The deal with KKR and PSP is expected to wrap up in the second half of 2025. AEP got some solid advice from J.P. Morgan Securities and Morgan Lewis & Bockius LLP, while KKR and PSP had help from Moelis, Morgan Stanley, and Simpson Thacher.
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