Mergers and acquisitions: 2 Ontario hydro companies ink deal

Guelph Hydro Electric Systems Inc. (Guelph Hydro) and Alectra Utilities Corporation will be joining forces. In mergers and acquisitions news, the Ontario Energy Board (OEB) gave the go-ahead for the merger to take place. The potential union met all the specifications of the OEB's no harm test.

There are conditions that have to be met upon the Jan. 2019 closing, but if all goes as planned, the City of Guelph will get an almost 5 per cent ownership of Alectra in addition to a permanent seat of the company's board of directors. The utility will serve more than one million customers. The promise of higher dividends will allow Guelph to put more money into other services and infrastructure areas. 

Part of the no harm test showed that the merger wouldn't hike rates any more than they might have been without the deal. It also found that the delivery of service wouldn't be impeded in any manner either. Quality and reliability aren't expected to be adversely affected by the merger.

The law governing mergers and acquisitions in Ontario may not always be so clear. In big deals such as the amalgamation of two larger corporations, confusing areas may be explained with greater understanding by a lawyer who practices business law. An business owner can either enter into a financially lucrative deal or lose his or her shirt if he or she does not have proper guidance. Business ventures always come with some risk, but that may be significantly lowered when parties have at least some understanding of the legalities involved. 

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