Amid a wave of consolidation in the energy sector, Duke Energy is buying Piedmont Natural Gas, its partner in a regional natural gas pipeline, for about $4.9 billion in cash, the companies said October 26.
"This combination provides us with a growing natural gas platform, benefiting our customers, communities and investors," said Lynn Good, chief executive of Duke Energy.
The acquisition will add Piedmont's more than one million gas customers in the southeastern states of North Carolina, South Carolina and Tennessee to Duke, the largest electric power holding company in the U.S.
Duke Energy provides energy to about 7.3 million U.S. customers in six states in the southeast and the Midwest. It also has international businesses and owns and operates power generation assets in North America and Latin America.
The acquisition has been approved by the boards of directors of both companies and is subject to regulatory approval, the companies said.
Both companies, based in Charlotte, North Carolina, will continue to operate separately until the transaction is completed, expected by the end of 2016.
The U.S. energy sector has seen a number of acquisitions and deals recently as companies try to preserve profits in the face of sharp falls in crude oil and natural gas prices.
Under the terms of the transaction, Piedmont shareholders will receive $60 in cash for each Piedmont share they hold, about a 40% premium to Piedmont's closing price on Oct. 23.
Duke Energy also will assume about $1.8 billion in Piedmont's debt, representing an enterprise value of about $6.7 billion.
Duke Energy and Piedmont are key partners in the $5 billion Atlantic Coast Pipeline project that will provide natural gas supplies to growing markets in Virginia and North Carolina.
Copyright Agence France-Presse, 2015
