Duke Energy (NYSE: DUK) will be the largest utility company as it merges with Progress Energy (NYSE: PGN) in a $26 billion agreement. Both groupsÂ’ board of directors unanimously agreed to the stock-for-stock transaction.
The new company, Duke Energy, will become the largest utility company in the country with a value of $65 billion. They will service approximately 7.1 million customers in six territories in North Carolina, South Carolina, Florida, Indiana, Kentucky and Ohio.Â
Under this merger deal, Progress EnergyÂ’s stockholders will receive 2.6125 shares of DukeÂ common stockÂ per share of Progress Energy common stock, which translates to $46.48 per share. Duke Energy is expected to assume $12.2 billion in Progress Energy debt.Â
Â“This combination of two outstanding companies is a natural fit,Â” said Bill Johnson, chairman, president and chief executive officer of Progress Energy. Â“It makes clear strategic sense and creates exceptional value for our shareholders. Together, we can leverage our best practices to achieve even higher levels of safety, operational excellence and customer satisfaction, and save money for customers by combining our fuel purchasing power and the dispatch of our generating plants.Â”Â
Â“Our industry is entering a building phase where we must invest in an array of new technologies to reduce our environmental footprints and become more efficient,Â” said Jim Rogers, chairman, president and chief executive officer of Duke Energy. Â“By merging our companies, we can do that more economically for our customers, improve shareholder value and continue to grow.Â”
This deal still needs to be aproved by all of the necessary regulatory agencies and shareholders of both companies. Duke Energy and Progress Energy expect to complete this deal by the end of 2011.