CenterPoint Energy has agreed to sell its Ohio natural gas distribution business, Vectren Energy Delivery of Ohio, to the National Fuel Gas Company for $2.62bn. 

The transaction involves approximately 5,900 miles (9,495km) of pipeline in Ohio, servicing around 335,000 customers. 

Under the terms of the deal, CenterPoint is expected to receive $1.42bn in proceeds upon closing and the remaining $1.2bn in 2027 via a seller note. 

The acquisition is expected to close in the fourth quarter of 2026, subject to customary closing conditions and regulatory approvals. 

CenterPoint Energy chairman and CEO Jason Wells said: “Our Ohio natural gas business is a strong and growing enterprise supported by a deeply committed local team focused on safety, excellence in execution and delivering positive outcomes for customers. 

“I would like to thank our Ohio natural gas employees and the other team members across CenterPoint who support this business for their continued dedication and service as we move through this process. 

“Together with National Fuel, we will be focused on delivering a seamless transition for the approximately 335,000 customers in west-central Ohio, and we are confident that National Fuel will support the continued growth and success of the business for the benefit of customers, communities and employees.” 

National Fuel said the acquisition will significantly increase its gas utility rate base, doubling it to approximately $3.2bn and expanding its reach into Ohio. 

The transaction will be accretive to its earnings per share, excluding acquisition-related expenses, and neutral to overall operating results by fiscal year 2028. 

National Fuel plans to finance this acquisition through a mix of debt, equity and cash flow from its operations. 

National Fuel president and CEO David Bauer said: “Our acquisition of CNP Ohio aligns with National Fuel’s strategic objective to increase the scale of our regulated operations through the addition of high-quality assets in a favourable regulatory and political jurisdiction. 

“Gaining a strong presence in a neighbouring service territory, with a similar workforce culture, and operations that mirror our existing gas utilities in New York and Pennsylvania is an added benefit for our company as well as our customers, employees and shareholders. 

“Acquiring a natural gas utility of this quality, with a long runway of capital investment pathways, is a great opportunity to reinvest free cash flow from our integrated upstream and gathering operations, further enhancing the long-term outlook for regulated growth.” 

Goldman Sachs & Co. and Guggenheim Securities served as financial advisors on this transaction, while Gibson, Dunn & Crutcher and others acted as legal advisors to CenterPoint. 

TD Securities (USA) served as the exclusive mergers and acquisitions advisor, TD and Wells Fargo Securities as financing advisors, and Jones Day as legal advisor to National Fuel. 

In 2020, CenterPoint agreed to sell its natural gas retail business to private equity firm Energy Capital Partners in a deal valued at around $400m.