Duke Energy Forms Partnership with Brookfield to Secure Investment in Duke Energy Florida for $6 Billion

Duke Energy has partnered with Brookfield to secure a $6 billion investment in Duke Energy Florida. The investment represents a significant premium to Duke Energy's current public equity valuation and will be used to fund the company's increased $87 billion, five-year capital plan and displace holding company debt. Brookfield will hold a 19.7% indirect equity interest in Duke Energy Florida and acquire it in phases over the next two years. The deal will strengthen Duke Energy's credit profile and enable further investments in energy modernization across its footprint.

Duke Energy (NYSE: DUK) has announced a strategic partnership with Brookfield, a leading global alternative asset manager, to secure a $6 billion investment in Duke Energy Florida. This significant transaction, which involves Brookfield acquiring a 19.7% indirect equity interest in Duke Energy Florida, will be executed in phases over the next two years. The investment represents a substantial premium to Duke Energy's current public equity valuation and will be used to fund an increased $87 billion, five-year capital plan for Duke Energy Florida and to displace holding company debt [1].

The deal underscores Duke Energy's commitment to meeting the rapidly growing and evolving energy demands of its customers in Florida. The $4 billion increase in Duke Energy Florida's five-year capital plan will take total investment in the state to over $16 billion through 2029. This plan is focused on grid modernization and resiliency initiatives, as well as generation capacity enhancements to support the dynamic service territory and expanding customer base [1].

Brookfield's investment will not only strengthen Duke Energy's overall credit profile but also enable further investments in energy modernization plans across its entire footprint. The transaction is structured such that Duke Energy will retain an 80.3% interest in the business and will continue to operate Duke Energy Florida with its best-in-class workforce. Brookfield will receive certain rights commensurate with its ownership interest [1].

Duke Energy's president and chief executive officer, Harry Sideris, expressed his satisfaction with the partnership, stating, "We’re pleased to have Brookfield, a highly regarded infrastructure investor, as a long-term partner in Duke Energy Florida. This significant transaction at a compelling valuation best positions Duke Energy to unlock additional capital investments in Duke Energy Florida during this unprecedented growth period. It also materially strengthens Duke Energy’s overall credit profile, which in turn enables us to invest in our energy modernization plans across our entire footprint – all while helping keep prices as low as possible for our customers" [1].

Sam Pollock, chief executive officer of Brookfield's infrastructure group, added, "We are delighted to partner with Duke Energy in a critical business and premier regulated utility like Duke Energy Florida through Brookfield’s Super-Core Infrastructure strategy. We look forward to supporting the continued growth of Duke Energy Florida’s regulated asset base and, accordingly, ensuring excellent service delivery for its customers" [1].

The transaction is subject to customary closing conditions, including regulatory approval from the Federal Energy Regulatory Commission and completion of review by the Committee on Foreign Investment in the United States as well as approval, or a determination that the transaction does not require approval, by the Nuclear Regulatory Commission. JP Morgan Securities LLC is serving as Duke Energy’s financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as Duke Energy’s legal advisor. RBC Capital Markets LLC is serving as Brookfield’s financial advisor, and Kirkland & Ellis LLP is serving as Brookfield’s legal advisor [1].

References:
[1] https://news.duke-energy.com/releases/duke-energy-partners-with-brookfield-to-secure-investment-in-duke-energy-florida-expands-capital-plan-to-87-billion