On January 10, 2011, Duke Energy and Progress Energy, Inc. (“Progress Energy”) announced the companies had entered into a merger agreement which, if consummated, will create the largest electric utility in the United States. The proposed merged company will operate as Duke Energy and will serve over 7.1 million customers in North Carolina, South Carolina, Florida, Indiana, Kentucky, and Ohio. The merged company would be worth a combined enterprise value of $65 billion and $37 billion in market capitalization. The companies hope to close the merger by the end of 2011.
The merger is conditioned on approval by the shareholders of each company. Post-merger, it is expected that Duke Energy shareholders will own sixty-three percent of the new company, and Progress Energy shareholders will earn thirty-seven percent on a fully diluted basis. Duke will be assuming $12.2 billion in Progress Energy’s debt, and Progress Energy will in turn receive $13.7 billion in Duke Energy shares.
Regulatory approvals will be required by the Federal Energy Regulatory Commission, the Department of Justice, the Nuclear Regulatory Commission, North Carolina Utilities Commission, and the South Carolina Public Service Commission. It is still unclear if other state authorities will attempt to assert jurisdiction over the merger, but the companies are providing informational filings to other state regulators.
A link to the press release announcing the merger is available here.