Dive Brief:
- New Mexico utility regulators are scrutinizing a $400 million stock purchase tied to Blackstone’s bid to acquire TXNM Energy, fueling calls from the state attorney general and consumer advocates for regulators to reject the deal.
- Blackstone’s proposed $11.5 billion acquisition of TXNM, the parent company of Public Service Co. of New Mexico, has cleared multiple approvals but still needs a green light from the New Mexico Public Regulation Commission.
- At issue is a stock issuance, completed in June 2025, in which TXNM sold 8 million newly issued shares to a Blackstone affiliate. Regulators are reviewing the transaction alongside the broader merger as questions emerge over whether the companies required prior approval for the stock purchase under state utility law and whether it was properly disclosed or structured as part of the acquisition. The commission’s revised procedural order, issued May 8, sets a public evidentiary hearing for Aug. 17.
Dive Insight:
It remains unclear whether the financing issue will affect approval of the acquisition. The proposed agreement was announced in May 2025 and is targeted to close in the second half of 2026.
Arif Gasilov, a partner at sustainability and ESG consulting firm Gasilov Group, said the stock purchase is central to the regulatory dispute because it may have given Blackstone a material financial position before regulators had an opportunity to impose conditions on the deal.
He added that the dispute could indicate either a significant regulatory misstep or that Blackstone has a strategy to address or overcome state regulatory concerns.
“The statute is unusually blunt about what happens to unauthorized transactions: ‘void and of no effect,’” Gasilov told Utility Dive in an email.
He noted New Mexico regulators previously rejected major utility transactions, including the 2021 denial of Avangrid’s bid to acquire PNM, signaling a willingness to block deals that do not meet commission standards.
Gasilov said the outcome could set a precedent for how much leverage state regulators retain over utility acquisitions, particularly if companies take financial positions before formal approval.
The stock purchase agreement was announced alongside the merger, and SEC filings show Blackstone agreed to vote the shares in favor of the transaction.
Blackstone and TXNM Energy argued in briefing materials that the transaction did not require prior PRC approval because it was separate from the merger and fell outside the statute governing utility acquisitions.
“We remain confident the transaction will receive the necessary approvals and continue to believe it provides long-term benefits for New Mexico, including commitments outlined in our merger application,” Connor Scannell, a Blackstone spokesperson, said in an email.
The company also said the stock sale “followed the Public Utilities Act” and was completed in good faith, “with no intent to circumvent any rules or regulations.”
TXNM said it continues to work through the New Mexico regulatory process and that the revised procedural schedule, including August hearings, still supports closing the acquisition before year-end. The company added that it does not expect the investigation to affect the transaction or outstanding approvals.
“We do not believe the outcome of the current investigation should have an impact on the proposed acquisition,” Eric Chavez, a spokesperson for TXNM, said in an emailed statement.
Opponents say Blackstone’s financing approach could put upward pressure on future rates and are urging the PRC to dismiss Blackstone’s acquisition with prejudice.
Docket materials indicate that Albuquerque-based consumer advocacy group Prosperity Works filed a motion in February prompting a show-cause order. Other advocates, including Santa Fe-based New Energy Economy and the New Mexico Attorney General’s office, have argued the acquisition should be denied if the violation is confirmed.
The intervening parties contend that the issue is not the stock purchase itself, but the timing of the transaction, saying that Blackstone obtained a significant financial stake in TXNM before state regulators had an opportunity to review the acquisition and negotiate customer protections. The dispute over the financing structure comes as the deal advances through other regulatory reviews.
Federal regulators, including the Federal Energy Regulatory Commission and the Federal Communications Commission, along with Texas utility regulators, have already approved the transaction. FCC approval was required because TXNM holds communications-related assets or licenses subject to review in a change-of-control transaction, according to company filings.
In addition to PRC approval, the deal also needs the Nuclear Regulatory Commission to sign off on it.
In August 2025, TXNM filed an application with the Public Utility Commission of Texas seeking approval for Blackstone Infrastructure to acquire the company.
The filing said the deal would keep TXNM headquartered in Texas with local management in place while preserving PUCT-regulated rates, union commitments and board oversight. It also includes about $35 million in customer rate credits over four years, plus $10 million for economic development and $5 million for community support over 10 years.
