Utility company Black Hills said it would buy peer NorthWestern Energy for US$3.6 billion, creating a larger regulated utility with greater scale to invest.

The utility will have a market capitalization of approximately $7.8 billion, based on each company’s closing stock price as of Monday.

South Dakota-based Black Hills Corp. is buying Northwestern Energy. The two utilities announced their all-stock transaction on Tuesday. Black Hills shareholders will have a 56% majority in the new company, which will be headquartered in Rapid City.