FirstEnergy completes sale of 30 percent stake in transmission subsidiary

FirstEnergy Corp. completed its sale of an additional 30 percent ownership interest in its FirstEnergy Transmission subsidiary to Brookfield Super-Core Infrastructure Partners.

The previously disclosed deal is valued at $3.5 billion. FirstEnergy received $2.3 billion of cash proceeds at closing, with the remaining $1.2 billion in interest-bearing notes due from Brookfield. The notes are expected to be paid off by the end of 2024.

Proceeds from the transaction will be used to strengthen FirstEnergy’s balance sheet and support its five-year, $26 billion Energize365 grid investment program.

“With the successful completion of this transaction, FirstEnergy is entering a new era of financial strength and growth,” Brian Tierney, FirstEnergy president and CEO, said. “We are pleased to leverage this strong foundation to make important investments to deliver reliable and safe power to our customers and meet the energy challenges of the future.”

This transaction follows Brookfield’s purchase of a 19.9 percent ownership interest in FirstEnergy Transmission for $2.4 billion in 2022.

With the closing of this deal, FirstEnergy will have completed approximately $7 billion in strategic equity financings.

“We are pleased to build on our successful partnership with FirstEnergy with a scaled follow-on investment in FET (FirstEnergy Transmission),” Natalie Hadad, managing partner in Brookfield’s Infrastructure Group and co-head of Brookfield Super-Core Infrastructure Partners (BSIP), said. “FET is a marquee, high-quality business with unique long-term capital investment and value creation opportunities, which is well aligned with our mutual objectives around the decarbonization and electrification of the economy. This transaction underscores BSIP’s strategy of investing in essential infrastructure assets that generate stable long-term cashflows across market cycles.”

FirstEnergy serves more than 6 million customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York. The company’s transmission subsidiaries operate approximately 24,000 miles of transmission lines that connect the Midwest and Mid-Atlantic regions.