DBRS Limited (DBRS Morningstar) notes TransAlta Corporation's (TAC; rated BBB (low) with a Stable trend by DBRS Morningstar) announcement that TAC will acquire the outstanding 40% stake of TransAlta Renewables Inc. (RNW) it does not already own for approximately $1.38 billion in a cash-and-stock deal (the Acquisition).

The Acquisition will be funded with a maximum aggregate of $800 million in cash and TAC shares capped at 46.4 million. The Acquisition is expected to be completed in Q4 2023 subject to an RNW shareholder vote, required regulatory approvals, and customary closing conditions.

DBRS Morningstar notes that the Acquisition is in line with its view of TAC's growth plan and will simplify TAC's organizational structure. DBRS Morningstar views the Acquisition as resulting in a modest improvement to TAC's business risk profile. Also, the Acquisition is not expected to have a material impact on TAC's credit risk profile. Overall, DBRS Morningstar does not expect the Acquisition to affect TAC's credit ratings.

Notes:

All figures are in Canadian dollars unless otherwise noted.

For more information on this credit or this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

DBRS Limited

DBRS Tower, 181 University Avenue, Suite 700

Toronto, ON M5H 3M7 Canada

Tel. +1 416 593-5577

(C) 2023 Electronic News Publishing, source ENP Newswire