Black Hills Corp. and NorthWestern Energy to Combine in All-Stock Merger to Create a Premier Regional Regulated Electric and Natural Gas Utility Company

Black Hills Corp. (NYSE: BKH) and NorthWestern Energy Group, Inc. d/b/a NorthWestern Energy (Nasdaq: NWE) today announced that each company’s board of directors has unanimously approved a definitive agreement to combine in an all-stock, tax-free merger that will create a premier regional regulated electric and natural gas utility company with a pro forma market capitalization of approximately $7.8 billion and a combined enterprise value of $15.4 billion, based on each company’s closing stock price as of August 18, 2025. Black Hills Corp. President and CEO, Linn Evans said, “We are excited to bring our two highly complementary companies together to create significant long-term value for customers, employees, shareholders, and the communities we serve. Our future success will be driven equally by the people, assets, and capabilities of both organizations. The combined company will have greater scale and financial strength to consistently deliver for customers across our service territories and invest at the pace and scale that today’s energy transformation demands. Our vision is to be the energy partner of choice for our customers, communities, and investors, and this merger will accelerate our ability to achieve this goal. NorthWestern Energy President and CEO, Brian Bird said, “Our merger with Black Hills will create a premier regional regulated utility company with a larger, more resilient platform consistent with mid-cap peers. Together, we will be better positioned to meet rising demand, accelerate investment in energy and grid infrastructure, and support customers and communities through a rapidly evolving energy landscape. NorthWestern and Black Hills are best-in-class operators, and we are confident that our closely aligned cultures and skilled workforces will enable us to successfully bring the companies together. We will remain a trusted energy partner to our customers and look forward to building a brighter future for the people, businesses, and communities we are privileged to serve.” Transaction Terms Under the terms of the agreement, NorthWestern shareholders will receive a fixed exchange ratio of 0.98 shares of Black Hills for each share of NorthWestern they own at the close of the transaction. The exchange ratio implies an approximately 4% premium based on the volume weighted average price of each company’s common stock since Black Hills and NorthWestern began discussing transaction terms in March 2025. Black Hills shareholders will continue to hold the same number of shares of the combined company that they hold of Black Hills immediately prior to the closing of the transaction. Upon completion of the merger, Black Hills shareholders will own approximately 56% and NorthWestern shareholders will own approximately 44% of the combined company on a fully diluted basis. Compelling Strategic and Financial Rationale Pure-play, regulated, vertically integrated utility with enhanced scale and diverse customer and fuel mix. The combined company will serve approximately 2.1 million customers across eight contiguous states -- Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming. Its electric utility will serve approximately 700,000 customers and operate approximately 38,000 miles of electric lines and approximately 2.9 gigawatts of owned generation capacity fueled by a mix of thermal, hydro, and wind. Its natural gas utility will serve approximately 1.4 million customers and operate approximately 59,000 miles of natural gas lines. Over time, this increased scale is expected to drive operating and cost efficiencies across the combined enterprise. Doubles rate bases and provides increased investment opportunities to meet rising energy demand, while ensuring competitive rates. The combination will double the size of each company’s rate base to a total of approximately $11.4 billion, with approximately $7.0 billion and $4.4 billion for electric and natural gas, respectively. Combined, the companies’ current investment plans from 2025 to 2029 exceed $7 billion and will be focused on building new electric and natural gas critical infrastructure to meet rising energy demand and advancing energy resilience in the regions where the combined company operates, while ensuring long-term competitive rates for customers. This level of investment is expected to increase following the combination as the combined company leverages its enhanced resources to make strategic investments that foster economic development in its expansive territories, including addressing the growing demand from data centers. Constructive and diversified regulatory environment. Rate structures for the electric and natural gas businesses have supportive regulatory mechanisms that promote efficient recovery of capital and minimize regulatory lag. No single jurisdiction will represent greater than 33% of the combined business. Increases long-term EPS target growth rate and accretive to each company. The combined company supports a long-term target EPS growth rate of 5% to 7%, greater than both Black Hills and NorthWestern on a standalone basis. The combination is expected to be accretive to each company’s EPS in the first year following the close of the transaction. Strong and predictable cash flows and high-quality investment-grade profile. The combined company is expected to have substantial cash flows to support a customer-focused capital investment program and an ongoing strong investment-grade credit quality. Strong and growing dividend. Both companies expect to maintain their existing dividend policies until the merger transaction is completed. Upon closing of the transaction and subject to market conditions and approval by the combined company’s board of directors, the combined company is expected to establish a dividend policy reflecting a prudent balance across return of capital, investing in growth, and balance sheet strength. Delivering Benefits to All Stakeholders Black Hills and NorthWestern believe that creating this multi-state utility platform is in the public interest. Benefits that reach more customers and deliver more value. Both companies are recognized for their strong commitments to reliability and customer service. Together, customers will benefit from extending shared best practices across the combined service territory. Over time, the combined company is expected to benefit from process improvements, shared systems, and coordinated operations. The resulting operating and cost optimization will support continued investment in safety, reliability, and customer service, and deliver long-term value for customers. Employer of choice with a highly skilled workforce. Led by industry veterans, the combined company will bring together talented teams that are focused on delivering safe, reliable, and cost-effective energy. As a larger and stronger organization, the combined company is expected to have an enhanced ability to retain, attract, and develop employees, including opportunities for career advancement, and will continue to be staffed and structured to meet the needs of its growing customer base. Consistent with each company’s goal of being an employer of choice, the combined company expects to continue providing competitive compensation and comprehensive benefits programs to employees. Ongoing community support. The combined company will continue to be an active part of the communities we serve as we support customers with a local workforce of highly skilled, passionate, and dedicated employees. In addition to maintaining a strong local workforce, both companies have long-standing reputations as excellent corporate citizens, and the combined company will maintain support for civic and philanthropic organizations across its combined service area. Advancing a clean energy future. The combined company will continue to work towards long-term emissions reduction as part of broader affordability, reliability, and sustainability commitments through investments in renewable energy sources, technological advancements, and modernizing infrastructure, among other initiatives. Leadership, Governance, Headquarters, Combined Company Name The leadership of the combined company will reflect the strengths and capabilities of both companies. Upon closing of the transaction, Mr. Bird will serve as Chief Executive Officer of the combined company; Marne Jones, Black Hills Senior Vice President and Chief Utility Officer, will serve as Chief Operating Officer; Crystal Lail, NorthWestern Chief Financial Officer, will serve as Chief Financial Officer; and Kimberly Nooney, Black Hills Senior Vice President and Chief Financial Officer, will serve as Chief Integration Officer. Linn Evans will continue serving as Chief Executive Officer of Black Hills through the close of the transaction, at which point he will retire. The combined company’s 11-member board of directors will include six directors designated by Black Hills, and five directors designated by NorthWestern, including Mr. Bird and Linda Sullivan, Chair of the NorthWestern board. Steven Mills, Chair of the Black Hills board, will be Chair of the combined company’s board of directors. The combined company will be headquartered in Rapid City, South Dakota, and will maintain a strong operational and leadership presence throughout the combined service territory, consistent with the practices of the companies prior to closing. The combined company will have a new name and ticker symbol, to be determined prior to the close of the transaction. The operating companies are expected to maintain their current names at transaction closing. Timing to Close and Approvals The transaction is expected to close in 12 to 15 months, subject to customary closing conditions, clearance under the Hart-Scott Rodino Act, approval from each company's shareholders, and regulatory approvals, including approval from commissions in the three states in which both companies operate (Montana, Nebraska, South Dakota) and in Arkansas if required, as well as the Federal Energy Regulatory Commission. Advisors Goldman Sachs & Co. LLC is serving as exclusive financial advisor to Black Hills, and Faegre Drinker Biddle & Reath LLP is serving as legal advisor. Greenhill, a Mizuho affiliate, is serving as exclusive financial advisor to NorthWestern, and Morgan, Lewis & Bockius LLP is serving as legal advisor.