Is the Integrys–Wisconsin Energy merger a "do" for investors?

Part 7
Is the Integrys–Wisconsin Energy merger a "do" for investors? (Part 7 of 10)

Will Integrys and Wisconsin Energy clear these regulatory hoops?

Utility deals are probably the toughest deals to get approved due to all the state-level approvals

Utility deals typically have 18-month-to-24 month timelines. This is due to the various state regulatory approvals required. These are, in reality, negotiations. I will talk more about the state approval in a separate piece, because it’s the key to overall approval. In this piece, I’ll discuss some of the more pro-forma regulatory approvals you should consider ahead of this deal.

TEG-WEC combinedEnlarge Graph

Antitrust

The companies will have to file under Hart–Scott–Rodino. But since the companies operate in complementary areas, there’s limited (if any) overlap. If anything, the FTC and the DOJ are worried about merging companies’ ability to raise prices. Since state regulators already set prices, this is really just a formality.

Federal Communications Commission, or FCC

The FCC usually has to sign off on utility deals even if they aren’t actually in the telecommunications business. There are some license transfers that need approval.

Federal Energy Regulatory Commission

Most utility deals have to pass muster with FERC, but they usually get approval. The action is with the state public utility commissions.

The SEC approval of the proxy

This one usually takes the longest of these non-state approvals. The two companies will release a joint proxy statement. That goes out to shareholders and explains the voting process at a special meeting held to approve the transaction. Invariably, the SEC will send the proxy back with comments. The companies will need a month to address these issues. Finally, the proxy will get approval and there’s a set waiting time between when the proxy is mailed and when the vote can happen.

Other important mergers

Other important merger spreads you should consider include the Covidien (COV) and Medtronic (MDT) deal as well as the DIRECTV (DTV) and AT&T (T) deal.

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