Veridian Corporation has entered into a Memorandum of Understanding to explore the potential benefits of joining utilities with Whitby Hydro Energy Corporation. Check this community hub regularly for updates and to stay involved with the process.
Both Veridian and Whitby Hydro see significant merits in the proposed merger. We are focused on delivering value to our customers and shareholders through greater efficiencies and innovation. Our best opportunity to mitigate against future rate increases is to achieve greater economies of scale, find efficiencies, and develop our competitive strength in a combined company. There are also regulatory incentives in place that encourage distributor consolidation and the pursuit of cost efficiencies that benefit ratepayers and municipal shareholders. This makes it an opportune time for our shareholders to consider a merger.
We believe that significant benefits can be realized for our customers, communities, employees, and other stakeholders. A combined company, through its larger size, will allow us to achieve savings for our customers and shareholders through greater efficiencies, innovations, and competitive strength. Our assessments to date show that customers will, on average, experience approximately 3% lower rates than they otherwise would have as customers of Veridian or Whitby Hydro alone. A merger is our best opportunity to mitigate against future rate increases and maintain 100% local ownership by the communities we serve.
A key objective of this potential merger is to strengthen our ability to deliver cost-effective, reliable energy services to the communities and the municipalities we serve. Our assessments to date show that, on average, customers of the merged company will experience approximately 3% lower rates than they otherwise would have as customers of Veridian or Whitby Hydro alone. Merging is also our best opportunity to mitigate against future rate increases as we can achieve greater economies of scale, find efficiencies, and develop competitive strength in a combined company.
Both Veridian and Whitby Hydro Boards of Directors have agreed that a merger would provide benefits to customers and shareholders and are recommending shareholders approve the proposed merger. Veridian and Whitby Hydro will seek the approval of the municipal councils in early 2018. Subject to those municipal shareholder approvals, an application would then be submitted to the Ontario Energy Board for regulatory review and approval. If approved, we anticipate completing the transaction by late 2018 or early 2019.
When one company merges with another there are synergies, or overall benefits, generated through finding efficiencies in several areas. We expect cost savings in this merger to arise through natural staff attrition, as well by eliminating duplication of external administrative services, such as legal, auditing, banking and consulting services. We also expect to see cost reductions through the consolidation of key operational systems, such as customer information systems and IT networks. We also believe that a review and adoption of each utility’s best practices will achieve additional savings within a new company.
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