“We are pleased to expand our partnership with Brookfield, one of the world’s largest and most respected infrastructure investors,” John W. Somerhalder, FirstEnergy’s board chair, interim president and chief executive officer, said in the statement. “This agreement efficiently raises capital at an attractive valuation and speaks to the strength and potential of our regulated growth strategies.”
The deal positions FirstEnergy to drive value for shareholders as it plans for additional smart grid and clean energy investments in its regulated transmission and distribution businesses, Somerhalder said.
FirstEnergy also is adding about $1 billion to fund long-term growth through 2025, an increase to the $17 billion target it set in 2021, according to the statement. The company said it would provide details on its investment plan later this year.
FirstEnergy Transmission, or FET, is a holding company for three utility subsidiaries: American Transmission Systems, Mid-Atlantic Interstate Transmission and Trans-Allegheny Interstate Line Co. FirstEnergy also owns transmission assets that aren’t part of FET in New Jersey, Pennsylvania, West Virginia and Maryland. Overall, the parent company retains ownership of almost 70% of its regulated transmission portfolio.
JPMorgan Chase & Co. served as lead financial adviser to FirstEnergy, with Citigroup Inc. also advising the utility. Moelis & Co. also acted as a financial adviser, providing a fairness opinion to FirstEnergy’s board of directors. Jones Day provided legal advice to First Energy, while the law firm Skadden, Arps, Slate, Meagher & Flom LLP advised Brookfield.