WASHINGTON (dpa-AFX) - Dominion Energy (D) on Tuesday after the bell announced that it agreed to sell Questar Pipelines to Southwest Gas Holdings Inc. (SWX), in a deal valued at $1.975 billion.
Questar Pipelines consists of FERC-regulated, long-term contracted, transportation and underground storage assets in Utah, Wyoming and Colorado, together with related services and processing entities.
The deal value includes the assumption of $430 million of existing indebtedness. The acquisition is expected to close in the fourth quarter.
Dominion Energy CEO Robert Blue said, 'We are pleased with the result of our sale process for these high-quality assets. This transaction represents another significant step in our evolution as a company, allowing us to focus even more on fulfilling the energy needs of our utility customers and continuing growth of our clean-energy portfolio, including development of the largest offshore wind farm in North America. We appreciate the focus and professionalism of the Questar Pipelines employees, who have maintained safe and reliable operations. We look forward to closure by year's end.'
The company said it will use the proceeds from the sale to reduce parent-level debt, including retiring the 364-day term loan that was entered into in July.
Meanwhile, earlier today, activist investor Carl Icahn had opposed Southwest Gas' plans to acquire Questar Pipeline.
In a letter addressed to the Southwest Board of Directors, Icahn said, 'During the past few years, management of SWX has made a number of egregious errors at the expense of shareholders. However, the purchase of Questar you are currently being rumored to make at the price you are willing to pay will make all past errors pale in comparison. The purchase will result in serious diminution of shareholder value.'
Following the news, shares of Southwest slipped over 3% in the extended trading session, while Dominion's shares were steady.
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