AltaGas Ltd. Announces Closing of its Acquisition of WGL Holdings, Inc.

Transformational Acquisition Enhances AltaGas’ Position as a Leading North American Clean Energy Infrastructure Company with Strong Growth Opportunities in Midstream, Power and Utilities

CALGARY, July 6, 2018 /CNW/ – AltaGas Ltd. (AltaGas) (TSX: ALA) announced today the closing of its approximately $9 billion acquisition of WGL Holdings, Inc. (WGL), creating a North American leader in the clean energy economy.

The combination of AltaGas and WGL supports AltaGas’ long-term vision and strategy, and results in a company with an enterprise value of over $17 billion, a presence in over 30 states and provinces, and approximately $6 billion in growth opportunities. AltaGas’ diversified and balanced portfolio of assets provides stability and predictability, with approximately 80 percent of 2019 EBITDA expected to come from its regulated gas distribution utilities and medium to long-term contracts underpinning combined Midstream and Power assets.

“AltaGas is well positioned to strengthen its North American clean energy platform and drive growth across all three business segments, Gas, Power and Utilities, while continuing to deliver exceptional customer service,” said David Harris, President and CEO of AltaGas. “The combined forces of AltaGas and WGL will expand clean energy choices for our customers and enhance AltaGas’ position as a leading North American clean energy infrastructure company.”

Combined Midstream Business Provides Producers with Global Market Access
AltaGas is now positioned to actively participate in energy export projects on both coasts of North America, and has a presence in the two most prolific gas plays – the Montney and Marcellus.  With its ownership interest in Canada’s first west coast propane export terminal – the Ridley Island Propane Export Terminal which is scheduled to be completed in Q1 of 2019 – AltaGas is ideally positioned to move natural gas liquids to premium Asian markets. In the Marcellus region, AltaGas connects low cost producers with high growth U.S. end-use markets and the Cove Point liquefied natural gas (LNG) terminal, which provides access for LNG exports off the east coast.

High Quality Utility Assets Underpinned by Regulated, Low Risk Cash Flow
Serving approximately 1.8 million customers with a rate base of approximately $4.5 billion, AltaGas’ utilities across North America deliver safe, reliable and clean natural gas to homes and businesses in eight jurisdictions.  Washington Gas serves high growth areas driving customer additions, general system betterment and accelerated replacement programs. AltaGas expects to grow its Utility rate base to approximately $7 billion by the end of 2021.

Generating Clean Energy with Natural Gas and Renewable Sources
With a clean power generation footprint covering hydroelectric, wind, small scale solar, biomass, and energy storage, AltaGas sees tremendous opportunity across North America to expand its clean energy offerings. The recent build and performance of the Pomona Energy Storage asset, as well as compelling value realization from the North West British Columbia Hydro Electric facilities, underscore our sustainable development capabilities as AltaGas continues to explore expansion opportunities.

“We have a clear path for profitable growth in each of our businesses well into the future,” continued Mr. Harris.  “We expect to maintain visible dividend growth and balance this with investments in growth opportunities in each of our business segments. Fundamental to all this is also strengthening our balance sheet and maintaining an investment grade credit rating.

“Ultimately, we believe this approach will provide the greatest value creation for shareholders, while continuing to deliver on our commitments to our customers and other stakeholders,” concluded Mr. Harris.

Executive Team Transition

With the closing of the WGL acquisition, Terry McCallister will be retiring, as Chief Executive Officer of WGL, after a career that spanned 18 years, including the last nine as Chairman and CEO. AltaGas has committed that at least one current member of the WGL board of directors will be recommended to the AltaGas board of directors. Mr. McCallister has agreed to join the AltaGas board of directors, subject to formal acceptance by the Board. Adrian Chapman will succeed Mr. McCallister as President and Chief Executive Officer of Washington Gas.  Mr. Chapman currently serves as President and Chief Operating Officer and has been a key part of WGL’s team for more than 36 years.

“This transaction is a powerful one,” stated Mr. Terry McCallister, Chief Executive Officer of WGL.  “Our combined forces will allow us to capitalize on the important inflection point in the clean energy economy by investing in projects like battery storage and other renewables. The assets and opportunities of the combined companies will provide for our customers’ energy needs today and tomorrow.”

Funding Strategy for WGL
AltaGas has funded the acquisition of WGL through a fully backstopped US $3 billion bridge facility as well as the $2.6 billion in equity proceeds raised in the February 2017 subscription receipt offering and private placement.

On June 22, 2018, AltaGas received $922 million through the previously announced sale of a 35 percent indirect equity interest in the North West British Columbia Hydro Electric facilities. Accordingly, at closing, AltaGas drew US $2.3 billion on the bridge facility.  AltaGas expects to rapidly repay the funds drawn on the bridge facility through further asset monetizations, as well as offerings of senior debt and hybrid securities.

Transaction Details
As previously announced, WGL shareholders receive US$88.25 in cash per WGL share.  As a result of the closing, WGL’s common stock is being delisted from the New York Stock Exchange, and WGL shareholders will be provided with instructions on how to receive the merger consideration for their shares by Computershare Trust Company, N.A. in its capacity as paying agent for the transaction.

Subscription Receipt Conversion
With the closing of the acquisition and in accordance with the terms of the subscription receipts, each outstanding subscription receipt of AltaGas has been automatically exchanged, without payment of additional consideration, for one common share of AltaGas.  Subscription receipt holders of record on June 25, 2018 will receive a final dividend equivalent payment of $0.1825 per subscription receipt held, net of applicable withholding taxes, representing the dividends declared on AltaGas’ common shares on June 11, 2018. Holders of the subscription receipts are not required to take any action in order to receive the common shares to which they are entitled. Trading of the subscription receipts will be halted on the Toronto Stock Exchange (“TSX”) prior to market opening on July 9, 2018 and AltaGas expects that the subscription receipts will be delisted by the TSX after close of trading on July 9, 2018.

About AltaGas
AltaGas is an energy infrastructure company with a focus on natural gas, power and regulated utilities. AltaGas creates value by acquiring, growing and optimizing its energy infrastructure, including a focus on clean energy sources. For more information visit:


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