Power Engineering - Babcock & Brown to acquire NorthWestern for $2.2 billion

26 April 2006 -- The Board of Directors of NorthWestern Corp. announced that the Company has reached a definitive agreement with Babcock & Brown Infrastructure under which BBI will acquire NorthWestern in an all-cash transaction at $37 per share, valuing the Company at $2.2 billion. The transaction is subject to regulatory and shareholder approvals.

BBI, based in Sydney, Australia, has committed to maintaining existing employee and customer service levels. Additionally, NorthWestern will have access to BBI's capital base and experience with the development of new transmission, wind power and coal projects. The transaction will not increase NorthWestern's debt.

Steven Boulton, CEO of Babcock & Brown Infrastructure said: "BBI is extremely pleased to have the opportunity to team with this well run, locally based utility and to further expand BBI's involvement in the United States. There are many parallels between the NorthWestern business and BBI's complementary businesses in Australia, New Zealand and Europe. Each of the businesses operates distribution and transmission assets in locally regulated environments with geographically large service territories. We look forward to meeting with the regulators and other state and local public officials to share details of our plans to ensure that NorthWestern will continue to improve service, stabilize rates and provide exceptional customer care in Montana, South Dakota and Nebraska."

E. Linn Draper, Chairman of the Board of NorthWestern, said: "We are pleased that our strategic review process has yielded an extremely positive outcome for all our stakeholders -- one that is far superior to the unsolicited proposals received during 2005, and which represents the best value for stockholders of the proposals we received as part of the process. In its review of the proposals, the Board recognizes that BBI provides the experience and stability that the local community demanded, while offering the highest value for stockholders. Additionally, the transaction will not increase NorthWestern's debt and includes adequate protections for NorthWestern's stockholders."

Michael J. Hanson, NorthWestern's President and CEO, said: "Throughout this process, the Board and senior management have been working to balance the interests of all of NorthWestern's stakeholders -- customers, employees, regulators and stockholders. NorthWestern has focused in particular on ensuring that a sale of the Company has no impact on the cost, reliability or quality of our customer service."

Hanson added: "We strongly believe that a sale to BBI represents the best outcome for all of NorthWestern's stakeholders. BBI is a long-term owner of energy, transmission and power generation businesses with a well earned and proven track record."

BBI and NorthWestern pledged to maintain strong relationships with the communities and the regulators in Montana, South Dakota and Nebraska where NorthWestern provides electricity and natural gas to its customers. BBI has indicated an intention to ensure local management accountability with a focus on a continuation of excellent customer service.

The transaction is subject to the approval of NorthWestern's shareholders and customary regulatory approvals, and is expected to be completed in 2007. Upon closing NorthWestern will cease to be a publicly traded company and will become a locally managed subsidiary of BBI.

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