American Electric Power Company Inc (NASDAQ:AEP) shares are trading higher in premarket Friday.

The company announced that a 50/50 strategic partnership between KKR & Co Inc (NYSE:KKR) and PSP Investments has agreed to acquire 19.9% non-controlling equity interest in its Ohio and Indiana & Michigan Transmission Companies (Transcos) for $2.82 billion.

The deal is expected to boost AEP’s ability to finance its $54 billion capital investment plan over the next five years.

The partnership will also allow AEP to improve the reliability of its transmission infrastructure and strengthen its balance sheet, to meet growing customer demand in the Midwest.

The stake acquired represents roughly 5% of AEP’s overall transmission rate base. The capital raised through this transaction will fund key projects across transmission, distribution, and generation, helping AEP manage its equity financing requirements through 2029.

“Executing on our five-year capital plan is critical to meeting growing energy demand and bolstering reliability for our customers. Electricity demand is anticipated to grow significantly in AEP’s footprint by the end of the decade,” said Bill Fehrman,” said AEP President and CEO Bill Fehrman.

“KKR and PSP Investments are experienced investors in the utilities and energy space with a proven track record of successful infrastructure investments.”

The transaction is expected to be completed in the second half of 2025 and is said to immediately benefit AEP’s earnings.

The agreement requires approval from FERC and clearance from the Committee on Foreign Investment in the U.S.

Price Action: AEP shares are trading higher by 0.81% at $93.01 in premarket at the last check Friday.

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