Advising Foreign Investors on U.S. Power Plant Buy
A consortium of international investors turned to a Holland & Knight team led by energy and mergers and acquisitions (M&A) attorneys to guide the purchase of a two-unit power plant that provides critical energy infrastructure in New York City. Lawyers from the firm's M&A, energy, financial services, taxation, private equity and employee benefits practices worked together to bring the deal to closing. The transaction is an example of how attorneys in the firm's broad base of services collaborate to offer clients support in challenging transactions.
Holland & Knight represented Astoria Power Partners Holding LLC (APPH), an entity comprising Munich Re unit MEAG MUNICH ERGO Asset Management GmbH; Netherlands-based APG Algemene Pensioen Groep NV, an asset management company; Tel Aviv, Israel-based Clal Insurance Co.; and U.S. institutional investors. The consortium purchased a state-of-the-art, natural gas-fueled power plant in Queens, New York, that is considered a model for clean energy and replaces most of the power generation lost from the decommissioning of a nuclear power plant near the city. Completed in 2006, the 1,230-watt, two-unit power plant contributes enough power to the area grid to power 1 million homes. The buyers purchased 100 percent of the first unit and 55 percent of the second unit.
The deal was challenging because it required state and federal regulatory approvals and involved international buyers. Negotiating with a large selling group of private equity owners added another layer of complexity, and most of the negotiations were conducted remotely because of the pandemic.
Because the acquisition involved foreign buyers, it required approval from the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investment to ensure it does not compromise national security. The transaction also required approvals from the New York State Department of Public Service and the Federal Energy Regulatory Commission (FERC), and was reviewed by the U.S. Department of Justice and the Federal Trade Commission for antitrust implications under the Hart-Scott-Rodino Act. Holland & Knight has extensive experience bringing matters before all of these agencies and obtained clearances without any unnecessary delays.
Holland & Knight has more than 1,600 attorneys practicing in over 200 areas of law. The Astoria matter was led by a New York-based energy attorney and an Atlanta-based M&A lawyer, with support from teams in four other cities that advised on tax implications, energy regulatory, environmental and other legal aspects of the purchase. Holland & Knight's Energy Team of more than 225 attorneys advises on a broad range of transactions, including public and private utilities, independent power producers and infrastructure investors that produce and deliver both traditional and renewable energy. The group works closely with the firm's practices in environment, natural resources, and public policy and regulation. The more than 300 members of the firm's Mergers and Acquisitions Team advise clients in every major industry and have extensive experience in cross-border matters such as the purchase of the Astoria Energy power generation facilities.