Duke Energy to Merge With Progress Energy

That’s the news. Here are some details:

Duke's offer was a 6.4 percent 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 million electricity customers in North Carolina, South Carolina, Florida, Indiana, Kentucky and Ohio, and 57,000 megawatts of generating capacity.

And here’s what the proposed merged company wants to do:

The two North Carolina companies will serve more than 7 million electricity customers, and will use the opportunity to eliminate redundancies in their service areas to focus on beefing up their nuclear power offerings. Duke and Progress have long been expanding their nuclear ambitions, and say the new combined company will have the largest regulated nuclear fleet in the U.S.

Here are comments from Duke Energy’s Jim Rogers (from Duke’s press release):

“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,” said Jim Rogers, chairman, president and chief executive officer of Duke Energy. “By merging our companies, we can do that more economically for our customers, improve shareholder value and continue to grow.

“Combining Duke Energy and Progress Energy creates a utility with greater financial strength and enhanced ability to meet our challenges head-on,” Rogers continued.

And Progress Energy’s Bill Johnson (same source):

“This combination of two outstanding companies is a natural fit,” said Bill Johnson, chairman, president and chief executive officer of Progress Energy. “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.

“This merger also provides predictable earnings and cash flows to support our dividend payments to shareholders,” Johnson added. 

As noted above, both companies are headquartered in North Carolina and their nuclear plant holding reflect this. Duke Energy owns Catawba (S.C.), McGuire (N.C.) and Oconee (S.C.). Progress Energy owns Brunswick (N.C.), Crystal River (Fla.), Harris (N.C.) and Robinson (S.C.)