Duke Energy to buy Progress Energy for $13.7 bln
Duke Energy said on Monday it agreed to buy Progress Energy Inc for USD 13.7 bn in stock, creating the largest US power company.
January 10, 2011 / 21:23 IST
Duke Energy said on Monday it agreed to buy Progress Energy Inc for USD 13.7 bn in stock, creating the largest US power company.
Duke's offer was a 6.4% premium over the last 20 trading days, the company said, and the deal would be accretive to Duke's earnings in the first year.The transaction would create an industry giant with approximately 7.1 mn electricity customers in North Carolina, South Carolina, Florida, Indiana, Kentucky and Ohio, and 57,000 megawatts of generating capacity.Duke is currently the third-largest US utility and would become both the largest in market value and generating capacity if the purchase is completed.That could create a hurdle for regulators, who have blocked or created roadblocks in other deals in recent years.Duke said Progress Energy shareholders would receive 2.6125 shares of common stock of Duke Energy for each share held, or USD 46.48 per share, representing a 4% premium to the stock's Friday close on the New York Stock Exchange.Duke Energy said it also will assume about USD 12.2 bn in Progress Energy's debt. The company also expects to effect a reverse stock split immediately prior to closing.Jim Rogers, chairman and chief executive of Duke, was expected to become chairman of the new company, while Bill Johnson, the chairman and CEO of Progress, would become CEO of the merged companies.Duke Energy shares closed at USD 17.79 on the New York Stock Exchange on Friday. Progress shares rose 1% in premarket trading to USD 45.20, while Duke shares slid less than 1% to $17.70. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
