(Bloomberg) -- American Electric Power Co. agreed to sell a minority stake in its transmission business to KKR & Co. and Canada’s PSP Investments for $2.8 billion.
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The investment firms will acquire a roughly 20% interest in AEP’s Ohio, Indiana and Michigan transmission companies, the companies said in a statement Thursday.
KKR and PSP, which formed a 50-50 partnership for the acquisition, are investing in transmission as electricity use in the US is expected to surge, thanks to data centers and artificial intelligence.
“Areas such as Ohio and Indiana are experiencing growth that has not been seen for decades,” AEP Chief Executive Officer Bill Fehrman said in the company’s own statement.
AEP’s transmission system has 40,000 miles (64,000 kilometers) of wires and is the largest in the US, according to its website.
AEP will use the proceeds from the sale to help pay for its five-year, $54 billion spending plan that includes investing in transmission and distribution projects.
Utilities across the US are raising capital and increasing investments as power demand rises. FirstEnergy Corp. earlier this year completed the sale of an additional 30% stake in its transmission unit to an affiliate of investment firm Brookfield Asset Management for $3.5 billion.
AEP’s sale is expected to close in the second half of 2025. J.P. Morgan Securities and Morgan Lewis & Bockius LLP advised AEP on the deal. Moelis, Morgan Stanley and Simpson Thacher advised KKR and PSP.
(Updates with details throughout.)
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