NorthWestern Energy Group (NWE) M&A Announcement summary

Deal rationale and strategic fit

• Merger creates a premier regional regulated electric and natural gas utility with a contiguous footprint across eight states, serving 2.1 million customers and enhancing scale, diversification, and resilience.

• Motivated by the need for scale, operational optimization, and ability to capture growth opportunities, especially in data centers and large load customers.

• Combines complementary cultures and skilled workforces, supporting smooth integration and operational excellence.

• Enhanced ability to invest in critical infrastructure, support energy transformation, and deliver reliable, cost-effective energy.

• Merger is timely due to unprecedented sector growth and increasing competition.

Financial terms and conditions

• Structured as a tax-free, all-stock transaction with no new debt; NorthWestern shareholders receive 0.98 Black Hills shares per NorthWestern share.

• Post-merger ownership: 56% legacy Black Hills shareholders, 44% legacy NorthWestern shareholders.

• Pro forma market capitalization of $7.8 billion and enterprise value of $15.4 billion as of August 18, 2025.

• Combined company will have a rate base of $11.4 billion and $7.5 billion in planned capital investments over five years.

• Implies a 4% premium for NorthWestern shareholders.

Synergies and expected cost savings

• Increased scale expected to drive operational optimization, supply chain efficiencies, and process improvements.

• Some cost savings are embedded in the 5–7% EPS growth target, with conservative assumptions.

• Enhanced negotiating power and leverage in procurement and large customer contracts.

• Economies of scale and shared systems expected to benefit customers and shareholders.

• Material increase in scale can unlock incremental growth opportunities and potential multiple expansion.