© 2015 The Texas Lawbook.
By Kerry Curry
(Oct. 2) — American Electric Power Company (AEP) said it will sell its commercial barge subsidiary to American Commercial Lines for $550 million.
The subsidiary, AEP River Operations, is a commercial inland barge company that delivers about 45 million tons of products annually, including 10 million tons of coal. It is based in Chesterfield, Mo., and operates 56 towboats and 2,301 barges.
Haynes and Boone lawyers from three different offices advised AEP on the deal.
“It’s a really interesting business and there are not a lot of really big transactions in the industry,” said Houston partner Walter Keneally who, with Houston partner Ricardo Garcia-Moreno, led the Haynes and Boone team. They assisted AEP Associate General Counsel Randy Ryan, the legal lead for the transaction.
The transaction was complicated because of the type of business, Keneally said. “It’s built around assets that are shifting all over the place. From a legal standpoint, it’s challenging to pin everything down and get schedules describing the assets because they are buying and selling things every day. Signing contracts everyday.”
Keneally is AEP’s exclusive outside counsel for AEP’s procurement of wind power and has provided transactional counsel to the company for 13 years.
As the regulatory environment changes, more M&A activity in the energy sector is likely, he said. In Ohio, for example, where AEP is based, regulations have required energy providers to put their generation assets into a separate entity.
“Now AEP is looking for strategic alternatives for that business,” he said. North Carolina-based Duke Energy recently sold off its Ohio-based power plants following the regulatory change. “This kind of thing happens from time to time in different states,” Keneally said.
Renewable energy deals done through “yield cos.” — tax advantaged publicly traded companies that are common in the energy industry — are also likely, he said. These companies are looking for assets to add to their portfolios of renewable energy.
For the AEP deal, the primarily Houston and Dallas-based Haynes and Boone deal team included partners Joe Vilardo (Finance), Jesse Gelsomini (Benefits), John Eldridge (Environmental) Odean Volker (Litigation), Keenan Kolendo (Real Estate) and Jennifer Wisinski (Hart-Scott-Rodino); counsel John Menke (Corporate) and Michael Threet (Tax); and associates Sameer Saxena, Valisa Berber-Thayer, Winnie Nwapa (Corporate), Brian Giovannini (Benefits), Alex Stevens (Labor) and Gavin George (Intellectual Property). Attorneys from the firm’s Washington, D.C. office also advised on the deal.
American Commercial Lines was represented by Latham & Watkins. None of the lawyers on the Latham deal team were based in Texas.
The transaction is expected to close in the fourth quarter.
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