The Minnesota Public Utilities Commission has approved the acquisition of Allete Inc. by American Global Infrastructure Partners (GIP), controlled by BlackRock, Inc., for more than $6 billion. This is reported in the Allete press release.
The deal is aimed at providing Allete with access to long-term capital and strengthening its financial position in public markets against the backdrop of significant growth in demand for electricity for data centers, the construction of new enterprises and for general electrification.
The transaction is expected to be completed at the end of 2025, subject to several key conditions, including a commitment to reduce the return on equity from 9.78% to 9.65%.
BlackRock is expanding its presence in the utility and energy markets, taking into account the sharp increase in demand from utilities in the United States and new data centers, which are the basis for the growth of artificial intelligence. GIP is also seeking to increase investments in data centers and is actively negotiating the acquisition of Aligned data centers worth $40 billion.
BlackRock is also in talks with other companies, including the acquisition of energy company AES Corp. worth $38 billion, which owns renewable energy enterprises, as well as natural gas and coal mining assets and utilities in the states of Indiana and Ohio.
The deal with Allete faced opposition from consumer advocacy groups Sierra Club, a coalition of large clients, and private equity critics, who warned of the risks associated with the company's transition to private ownership, including a potential increase in electricity bills.
BlackRock, Inc. is an American multinational investment company with headquarters in New York (USA). BlackRock provides investment management, risk management, and advisory services to institutional and retail clients. The company owns stakes in Apple, Microsoft, Google, Amazon and Tesla. BlackRock's total assets under management amount to $12.5 trillion.
Allete is an American energy management company for coal—fired power plants, biomass and natural gas power plants, hydroelectric power plants, wind and solar power plants. The company serves the mining, paper, pulp and secondary woodworking industries, as well as pipelines, etc. The headquarters is located in Duluth, Minnesota.
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