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.
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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.
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