Liberty Utilities Co. entered into an agreement to acquire Kentucky Power Company and AEP Kentucky Transmission Company, Inc. from American Electric Power Company, Inc. (NasdaqGS:AEP) and AEP Transmission Company, LLC for $2.6 billion on October 26, 2021. The total price of approximately $2.846 billion, includes the assumption of approximately $1.221 billion in debt. Kentucky Power Company will be acquired from American Electric Power Company, Inc. and AEP Kentucky Transmission Company, Inc. from AEP Transmission Company, LLC. As of September 29, 2022, Liberty Utilities and American Electric Power entered into an amendment (the "Amendment") to the stock purchase agreement dated October 26, 2021 pursuant to which Liberty agreed to purchase Kentucky Power Company and AEP Kentucky Transmission Company, Inc. The Amendment provides a path to complete the Transaction at a revised purchase price of $2.646 billion, including the assumption of approximately $1.221 billion in debt. As part of the transaction, Liberty will acquire all assets and assume liabilities of the Kentucky operations except for pension and other postretirement benefit obligations for the period the impacted employees were employed by AEP. The transaction directly impacts 360 employees, including 315 who work for Kentucky Power and 45 from AEP whose roles directly support Kentucky operations, and these employees will transfer to Liberty when the sale is completed. AQN has obtained a $2.725 billion syndicated acquisition financing commitment from CIBC and Scotiabank to support the transaction. The net proceeds of the Offering are expected to be used to (a) partially finance the transaction purchase price, and (b) in the short-term, prior to the closing of the transaction, reduce amounts outstanding under existing credit facilities of the company and its subsidiaries. The remainder of the Transaction cash purchase price of approximately $979 million is expected to be satisfied through a variety of funding sources, which may include a combination of hybrid debt, equity units, and/or the monetization of non-regulated assets or investments. Concurrent $646 million bought deal common equity financing will fund a portion of the transaction purchase price. As of January 12, 2022, Algonquin Power & Utilities Corp. announced underwritten public offering in the United States of $750 million aggregate principal amount of 4.75% fixed-to-fixed reset rate junior subordinated notes series 2022-B due January 18, 2082 and underwritten public offering in of $320 million aggregate principal amount of 5.25% fixed-to-fixed reset rate junior subordinated notes series 2022-A due January 18, 2082. The proceeds of offerings will be used to partially fund the acquisition. Under the terms of termination, the Corporation may be required to pay a termination fee of $65 million.

The transaction is subject to regulatory approvals from the Kentucky Public Service Commission and the Federal Energy Regulatory Commission; federal clearance pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, clearance from the Committee on Foreign Investment in the United States, the approval by each of the Kentucky Public Service Commission and FERC, the approval of the Public Service Commission of West Virginia with respect to the Kentucky Power Transaction and the termination and replacement of the existing operating agreement for the Mitchell coal generating facility (in which Kentucky Power owns a 50% interest, representing 780 MW) (the “Mitchell Plant”), and with respect to the termination and replacement of the existing operating agreement for the Mitchell Plantand the satisfaction of other customary closing conditions. If the acquisition agreement is terminated in certain circumstances, the Company may be required to pay to AEP a termination fee. On May 4, 2022 the Kentucky Public Service Commission (“KPSC”) issued an order approving the Kentucky Power Transaction. On July 1, 2022, the Public Service Commission of West Virginia ("WVPSC") issued an order on the Mitchell Agreements that is inconsistent with the KPSC’s order on the Mitchell Agreements. The transaction is expected to close in the second quarter of 2022. As of October 27, 2021, the transaction is expected to close in mid-2022. As of February 24, 2022, the transaction is expected to close in the second quarter of 2022. As of August 12, 2022, Kentucky Power Transaction is expected to close in the second half of 2022. As of September 30, 2022, the transaction will be completing following approval of the transaction from FERC, which is due by December 16 and is expected to close in January 2023. In December 2022, FERC denied approval of the sale, citing insufficient evidence to show the transaction wouldnt affect customer rates. American Electric Power and Liberty Utilities filed a new application with the FERC seeking approval of the sale of AEPs Kentucky operations to Liberty. The companies are asking FERC for expedited review of the application with a goal of closing the $2.6 billion transaction by April 26, 2023. The proceeds from the sale will be used to eliminate AEP's forecasted equity needs in 2022 as the company invests in regulated renewables, transmission and other projects. The transaction will be $0.01-$0.02 accretive to 2022 ongoing earnings. The Kentucky Power Transaction is expected to add over $2 billion of regulated rate base assets. AQN expects the Kentucky Power Transaction to be accretive to Adjusted Net Earnings per common share in the first full year of ownership, generate mid-single digit percentage Adjusted Net Earnings per common share accretion thereafter, and support growth in AQN’s Adjusted Net Earnings per common share over the long term.

Barclays and Goldman Sachs acted as financial advisors and John Klauberg, Michael Espinoza, and Katie Ostman of Morgan, Lewis & Bockius LLP acted as legal advisor to American Electric Power Company. Morgan Stanley & Co. LLC and CIBC Capital Markets acted as financial advisors to Algonquin Power & Utilities Corp. parent company of Liberty Utilities Co. for the transaction. Eli Hunt, Adeeb Fadil, Matthew Einbinder, Amy Beller, Genevieve Dorment, Brian Robbins, Krista McManus, Steven DeLott, Russell Light, Peter Guryan and Kelly Karapetyan of Simpson Thacher & Bartlett LLP acted as legal advisor to Liberty Utilities Co.

Liberty Utilities Co. cancelled the acquisition of Kentucky Power Company and AEP Kentucky Transmission Company, Inc. from American Electric Power Company, Inc. (NasdaqGS:AEP) and AEP Transmission Company, LLC on April 17, 2023. The parties entered the Termination Agreement because the conditions precedent to closing the sale could not be satisfied prior April 26, 2023, the date after which either party had the unilateral right to terminate the agreement.