Canada's Hydro One in talks to buy Toronto Hydro

Canada's Hydro One Ltd is in talks to buy municipal electricity distributor Toronto Hydro Corp for about C$3 billion ($2.2 billion) as the city of Toronto explores options to finance various infrastructure projects, people with knowledge of the matter told Reuters. The two companies have been in discussions about the deal for the past few months but the talks have not entered final stages, one of the people said. They cautioned the talks could fall apart. The combined company could generate potential synergies of about C$1 billion, the people added.
The city of Toronto, which owns 100 percent of Toronto Hydro, is also exploring other ways to monetize its assets, including by publicly listing Toronto Hydro, as well as by selling its Green P parking business or other real estate assets, one of the people added. The Green P parking asset, which includes a popular app, is likely worth more than C$1 billion, that person said.
Canada's most populous city needs a massive infrastructure upgrade to meet the growing demands of residents. But the city has struggled to raise sufficient funds to finance its rail and road networks. Toronto Hydro has also been under financial pressure as it attempts to make infrastructure investments surrounding its electricity grid. Last November, it cut its dividend to the city of Toronto. A deal would also help Hydro One's growth ambitions as a public company after it raised C$1.8 billion in one of Canada's biggest IPOs in 2015.