On June 4, 2024, KKR & Co. Inc. completed the acquisition of an indirect minority equity interest in the Labrador-Island Link (LIL) from Emera Inc. The transaction value was $1.19 billion, consisting of $957 million in cash and $235 million for assuming Emera's obligation to fund the remaining initial capital investment.
The LIL is a 1,100 km high-voltage transmission line that delivers renewable energy to Newfoundland, Nova Scotia and beyond. Officially commissioned in 2023, the LIL is a vital transmission line of strategic importance to Atlantic Canada and has helped strengthen the Newfoundland and Labrador power grid. The LIL is operated by Newfoundland and Labrador Hydro (“NL Hydro”), a Crown corporation owned by the government of Newfoundland and Labrador.
As part of its overall commitment to the Lower Churchill Project, Emera has been an equity investor in the construction of the LIL alongside NL Hydro. The transaction provides for a one-time, up-front payment at closing in exchange for Emera’s indirect interest in the LIL, meaning KKR will receive quarterly distribution payments over the remaining life of the 50-year LIL contract and allow Emera to reduce corporate debt and fund its investments in its regulated utility businesses. Emera will remain actively engaged in the LIL, along with NL Hydro, by continuing to provide sustaining capital investments to support ongoing operations.
KKR’s interest in the LIL reinforces the importance of clean energy infrastructure to serve Atlantic Canada and markets beyond. KKR has significant experience investing in infrastructure globally and has stable, ongoing access to capital, which affords the firm the ability to take a long-term “buy and hold” view. KKR made this investment through capital accounts advised by KKR.
Bennett Jones LLP acted as Canadian legal counsel for KKR with a team led by John Mercury, David Macaulay and John Lawless, which included Kevin Myson, Rebecca Taylor, Niki Gill, Jonathan Filippone, Flutra Kacuri and Kieran Brennan, (Corporate), Anu Nijhawan, Marshall Haughey, Spencer Brown and Anna Lekach (Tax), Laurie Smith and Jayce Eadie (Regulatory), Karen Dawson, Taylor Davis and Dane Patton (Financial Services), Melanie Aitken and Zirjan Derwa (Competition/Investment Canada) and Serge Dupont (Governmental Affairs & Public Policy).
Simpson Thacher & Bartlett LLP acted as U.S. legal counsel for KKR with a team led by M. Breen Haire and Shamus Crosby, which included Jack Traylor, Braxton Duhon, Christine Robb and Matthew Warren (Corporate), Nancy Mehlman, Adam Arikat and Lina Pan (Tax), Lori Lesser and Chandler Gerard-Reimer (Intellectual Property), David Rubinsky and Alisa Tschorke (Executive Compensation and Employee Benefits), Krista McManus (Real Estate), Peter Guryan and Jamie Logie (Antitrust), Brian Steinhardt, Brandon Barton and Adam Danciu (Credit).
Osler, Hoskin & Harcourt LLP acted as legal counsel to Emera Inc. with a team led by John Macfarlane and Kai Sheffield, which included Amy Sigurdson, Min Oh, Diana Windrim and Kiana Blake (Corporate), Rocco Sebastiano and Cole Tavener (Commercial/Infrastructure), David Davachi and Jean-Philippe Dionne (Tax) and Kaeleigh Kuzma and Zach Rudge (Competition).
Cox & Palmer acted as Newfoundland and Labrador legal counsel to Emera Inc., which included Griffith Roberts (Commercial) and Robert Arkin (Corporate/Tax).
Emera Inc. was also advised by its internal legal team, which included Pollyanna Lord, David Landrigan, Rachel Wojcik, Mike Barrett and Will Szubielski.
Scotiabank acted as exclusive financial advisor to KKR. TD Securities acted as exclusive financial advisor to Emera.