Duke Energy and Progress Energy to merge, creating US' largest utility

[News_Editor]

Duke Energy and Progress Energy to merge, creating US' largest utility

2011-01-11 05:20:51 GMT+7 (ICT)

CHARLOTTE, NORTH CAROLINA (BNO NEWS) -- Duke Energy on Monday announced that it will merge with Progress Energy to create the United States' largest utility in transaction worth billions.

The definitive merger agreement was approved unanimously by both companies' board of directors. The two companies will combine in a $26 billion stock-for-stock transaction and will be known only as Duke Energy.

"Combining Duke Energy and Progress Energy creates a utility with greater financial strength and enhanced ability to meet our challenges head-on," said Jim Rogers, chairman, president and chief executive officer of Duke Energy.

The combined company will be the country's largest utility with approximately $65 billion in enterprise value and $37 billion in market capitalization. Duke Energy will provide service to 7.1 million electric customers in six states.

In addition, the merged company will generate around 57 gigawatts of domestic generating capacity from a diversified mix of coal, nuclear, natural gas, oil and renewable resources.

Rogers added that the merger was necessary as the energy industry targets the reduction of environmental impact and becoming more efficient through new technologies.

"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," said Bill Johnson, chairman, president and chief executive officer of Progress Energy.

Under the merger agreement, Progress Energy's shareholders will receive 2.6125 shares of common stock of Duke Energy in exchange for each share of Progress Energy common stock.

Progress Energy shareholders would receive a value of $46.48 per share, or $13.7 billion in total equity value. In addition, Duke Energy will assume Progress Energy net debt valued at $12.2 billion.

After completion of the merger, it is expected that Duke Energy shareholders will own approximately 63 percent of the combined company and Progress Energy shareholders will own approximately 37 percent.

Rogers will become executive chairman of the new company. Johnson will become president and chief executive officer of the new company. Both will serve on the board of directors of the combined company, which will be composed of 18 members, 11 of them designated by Duke Energy’s board of directors and seven by Progress Energy’s board of directors.

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