Electric utility Duke Energy has signed an agreement to acquire the US-based distributor Piedmont Natural Gas for $4.9bn.
Duke Energy president and CEO Lynn Good said: "This combination provides us with a growing natural gas platform, benefiting our customers, communities and investors."
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Duke Energy said the companies are also serving as joint investors in the $5bn Atlantic Coast natural gas pipeline serving Eastern North Carolina.
Piedmont Natural Gas chairman, president and CEO Tom Skains said: "The strategic combination of our two companies will deliver compelling value to our shareholders, greatly expand our platform for future growth, enhance our ability to provide excellence in customer service and give our employees more opportunities in one of the largest energy companies in the United States."
Upon closing of the transaction, expected by the end of 2016, Piedmont shareholders will receive $60 in cash for each share of Piedmont common stock.
Duke Energy, which would assume about $1.8bn Piedmont’s existing net debt, plans to fund the transaction with a combination of debt, between $500m and $750m of newly issued equity as well as other cash sources.
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By GlobalDataFollowing the transaction, Piedmont will retain its name and operate as Duke Energy’s business unit. It will also maintain its headquarters in Southeast Charlotte.
The acquisition is subject to approval by the North Carolina Utilities Commission as well as approval from Piedmont’s stockholders.
Till the transaction concludes, the companies will continue to operate as separate entities, Duke Energy stated.
Image: Duke Energy Center in Charlotte, 2010. Photo: courtesy of Duke_Energy_Center_and_The_Westin_Charlotte,_2010.jpg: Justin Cozart
