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Allete agrees to $6.2 billion sale offer

In connection with the merger, CPP Investments and GIP will acquire all of the outstanding common shares of Allete for $67.00 per share in cash representing an enterprise value of approximately $6.2 billion, including Allete's net debt.

Allete, Inc. and a partnership led by Canada Pension Plan Investment Board and Global Infrastructure Partners today jointly announced that they have entered into a definitive agreement under which the partnership will acquire Allete for $67 per share in cash, or $6.2 billion including the assumption of debt.

Allete is a leading energy company and provider of safe, reliable, and competitively priced energy with a national footprint. Together, Allete and its family of companies, which includes regulated utilities and renewable energy companies, are focused on driving the clean-energy transition by expanding renewables, reducing carbon, enhancing grid resiliency, and driving innovation.

“Our ‘Sustainability-in-Action' strategy has secured Allete’s place as a clean-energy leader. Through this transaction with CPP Investments and GIP, we will have access to the capital we need while keeping our customers, communities and co-workers at the forefront of all that we do, with continuity of our day-to-day operations, strategy and shared purpose and values,” said Allete Chair, President, and Chief Executive Officer Bethany Owen. “CPP Investments and GIP have a successful track record of long-term partnerships with infrastructure businesses, and they recognize the important role our Allete companies serve in our communities as well as our nation’s energy future. Together, we will continue to invest in the clean-energy transition and build on our 100 plus-year history of providing safe, reliable, affordable energy to our customers."

CPP Investments and GIP are premier, well-resourced infrastructure investors at a global scale with deep industry expertise and long-term outlooks. Together, they bring over four decades of experience investing in large-scale infrastructure businesses across sectors to support sustainable, long-term growth. Both CPP Investments and GIP pride themselves on their responsible investment approach, which is centered on delivering value to their organizations and the communities in which they operate.

“Our ‘Sustainability-in-Action' strategy will require focused execution and significant capital," said Owen. "Transitioning to a private company with these strong partners will not only limit our exposure to volatile financial markets, it also will ensure Allete has access to the significant capital needed for our planned investments now and over the long term. Importantly, CPP Investments and GIP are aligned with ALLETE’s values of safety, integrity, planet and people. They also recognize the importance of our employees and our ties to the communities we serve and in which we operate. To that end, we are proud to remain locally managed as we enter this next chapter as committed as ever to our customers, our communities and our employees. I look forward to all we will achieve together.”

Said James Bryce, Managing Director and Global Head of Infrastructure, CPP Investments: “Allete’s management team has done an excellent job leading the company toward a truly sustainable clean-energy future. Together with GIP, we look forward to bringing our sector expertise and long-term capital to support Allete’s strong management team as they continue to deliver safe, reliable, affordable energy services to their customers.”

“Allete is at the forefront of the clean energy transition and we are thrilled to support the delivery of the company’s ‘Sustainability-in-Action’ strategy, which we believe will generate substantial value both for Allete’s customers and CPP contributors and beneficiaries.”

Under the terms of the merger agreement governing the proposed transaction, several commitments have been made by CPP Investments and GIP to align with Allete’s shared purpose, culture and values, including:

. Retaining Workforce: The agreement provides commitments with respect to workforce retention, as well as maintaining compensation levels and benefits programs. The agreement also honors union contracts including our strong partnership with the International Brotherhood of Electrical Workers.

. Maintaining Current Headquarters and Leadership: Allete’s Minnesota Power and Superior Water, Light and Power (SWL&P) will continue as independently operated, locally managed, regulated utilities. Bethany Owen will continue as Chief Executive Officer, and the current management team will continue to lead Allete and remain as the primary points of contact for customers, regulators and other stakeholders. Allete will continue to be headquartered in Duluth.

. Contributing to Community: Allete and its family of businesses and the Minnesota Power Foundation will continue to make economic and charitable contributions in its service territories to support vibrant and sustainable communities, close opportunity gaps, and help people of all ages live with purpose and passion. Allete will continue to invest corporate resources and employee volunteer hours to help build thriving communities.

In addition, the transaction will support existing commitments made by Allete such as:

. Allete’s Clean-Energy Goals: All Allete companies will remain committed to advancing a clean-energy future, through solar, wind, storage and transmission infrastructure and achieving carbon-free goals of the respective states in which the companies operate.

. Retail or Municipal Rates for Utility Customers: Following the close of the acquisition, Minnesota Power and SWL&P will continue to be regulated by the Minnesota Public Utilities Commission (MPUC), the Public Service Commission of Wisconsin (PSCW) and the Federal Energy Regulatory Commission (FERC). The acquisition is not expected to impact retail or municipal rates for utility customers.

Terms, Approvals and Timing
In connection with the merger, CPP Investments and GIP will acquire all of the outstanding common shares of Allete for $67.00 per share in cash representing an enterprise value of approximately $6.2 billion, including Allete's net debt. This represents a premium of approximately 19.1% to Allete’s closing share price on December 4, 2023, the date prior to a media article reporting that Allete was exploring a sale. The consideration also represents a 22.1% premium to the 30-day volume weighted average share price prior to that date.

The acquisition was unanimously approved by Allete's Board of Directors and is expected to close in mid-2025, subject to the approval of Allete’s shareholders, the receipt of regulatory approvals, including by the MPUC, PSCW and FERC, and other customary closing conditions. Dividends payable to Allete shareholders are expected to continue in the ordinary course until the closing, subject to approval by Allete’s Board of Directors.

Upon completion of the acquisition, Allete's shares will no longer trade on the New York Stock Exchange, and Allete will become a private company.