Yahoo Finance Is Ameren Looking to Expand in Kansas by Buying Westar Energy?
Do Ameren and Canadian Firms Have Their Eyes on Westar Energy?
Why Westar Energy?
Ameren (AEE) and Borealis, a Canadian infrastructure investment management firm, are allegedly interested in a Westar Energy (WR) takeover. Neither company nor Wester has published any official communication about a possible merger.
Westar Energy (WR) is, however, considering sale options. There have recently been a lot of mergers and acquisitions in the sector to perk up growth.
Utilities seek inorganic growth
Electric utilities have been witnessing negligible growth in the sector due to tepid load growth. Large-cap utilities are expanding their natural gas distribution operations. They have limited growth opportunities in the core business. Westar Energy’s management said last year that Westar is more of a seller than a buyer in the utility domain.
Ameren has significant operations in Missouri and Illinois. So expanding its operations in neighboring Kansas may strategically benefit Ameren. Borealis may be interested in Westar. Earlier, it showed interest in buying ITC Holdings (ITC).
Utilities are on a roll
The US utility sector (VPU) has shown a massive surge in the last three months. Westar Energy rose more than 30% in the last 12 months. On average, utilities rose nearly 10% in the same period. Fundamental issues such as lower usage and high operating costs upset the utilities (JXI) sector. But some developments such as interest rates and quarterly earnings turned positive and fueled the rally.
In the next part of the series, we’ll see what Westar has in store for its potential buyer.
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