The Ontario Energy Board has approved the proposed merger of Veridian Connections Inc. and Whitby Hydro Electric Corporation.
On December 20, 2018, the Ontario Energy Board approved the proposed merger of Veridian Connections Inc. and Whitby Hydro Electric Corporation. It is currently projected that the merger of the two companies will occur early in the second quarter of 2019.
No. The approval of municipal shareholders for a proposed merger is a critical, but not the final, milestone in this process. Shareholder approvals positions Veridian and Whitby Hydro and their shareholders to enter into a merger agreement and then submit a Mergers, Acquisitions, Amalgamations and Divestitures (MAADs) application to the OEB for regulatory review and approval. The OEB process will review many aspects of the merger, including a “No Harm Test” that ensures the proposed merger does not have an adverse effect on ratepayers. A merger would only take place following OEB approval, and assuming normal legal conditions as set out in the merger agreement have been met.
We are focused on this merger only and are not investigating any type of sale. This is a proposed merger of our two companies to create a new yet-unnamed energy corporation. The energy market is constantly evolving and we believe the creation of a new more efficient and better-resourced company through a merger will generate significant benefits for our customers, communities, employees, and other stakeholders.
We believe that significant benefits can be realized for our customers, communities, employees, and other stakeholders. A combined company, through its larger size, will allow us to achieve savings for our customers and shareholders through greater efficiencies, innovations, and competitive strength. Our assessments to date show that customers will, on average, experience approximately 3% lower rates than they otherwise would have as customers of Veridian or Whitby Hydro alone. A merger is our best opportunity to mitigate against future rate increases and maintain 100% local ownership by the communities we serve.
A key objective of this potential merger is to strengthen our ability to deliver cost-effective, reliable energy services to the communities and the municipalities we serve. Our assessments to date show that, on average, customers of the merged company will experience approximately 3% lower rates than they otherwise would have as customers of Veridian or Whitby Hydro alone. Merging is also our best opportunity to mitigate against future rate increases as we can achieve greater economies of scale, find efficiencies, and develop competitive strength in a combined company.
Both Veridian and Whitby Hydro Boards of Directors have agreed that a merger would provide benefits to customers and shareholders and are recommending shareholders approve the proposed merger. Veridian and Whitby Hydro will seek the approval of the municipal councils in early 2018. Subject to those municipal shareholder approvals, an application would then be submitted to the Ontario Energy Board for regulatory review and approval. If approved, we anticipate completing the transaction by late 2018 or early 2019.
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