Executive Insight

Wisconsin Energy’s plan to acquire Integrys is credit negative

Moody’s

Wisconsin Energy Corp. (WEC, A2 negative) recently announced it planned to acquire Integrys Energy Group Inc. (Baa1 review for upgrade) for $9.1 billion, including the assumption of $3.3 billion in debt.

WEC will finance the acquisition with $4.3 billion of equity and $1.5 billion of new debt. The leveraged acquisition of a more weakly-rated entity is credit negative for WEC, but the announced divestiture of its nonregulated marketing subsidiary is credit positive for Integrys. Because of the transaction, Moody’s changed WEC’s rating outlook to negative and placed Integrys’ rating on review for upgrade.

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