By Connor Hart

KKR is partnering with the Public Sector Pension Investment Board to buy a 19.9% interest in two units of American Electric Power for $2.82 billion.

New York investment firm KKR said Thursday that it formed a 50/50 strategic partnership with PSP, one of Canada's largest pension investors, to pursue the acquisition. KKR is funding the deal from its core infrastructure strategy, it added.

In the deal, KKR and PSP will obtain a stake in AEP's Ohio and Indiana transmission company, as well as its Michigan transmission company. The investment in these two companies will support the utility's ability to meet increasing customer demand and enhance grid reliability, the companies said.

The investment additionally will support AEP's previously announced five-year capital plan to benefit customers, they said.

Columbus, Ohio-based AEP will remain the majority owner and operator of both transmission companies. The company, which serves 5.6 million retail and wholesale customers across 11 states, lists Ohio, Indiana and Michigan among its fastest-growing service territories, driven by what KKR and PSP called strong manufacturing industries and new sources of load growth.

"This transaction allows AEP to efficiently finance a growing segment of our business and enhances our ability to serve growing customer demand and provide reliable service to our customers," Chief Executive Bill Fehrman said.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

January 09, 2025 15:29 ET (20:29 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.