Dominion Energy and SCANA Corporation have agreed to merge in a stock-for-stock deal worth US$7.9 billion, Dominion Energy said on Wednesday.
Including assumption of debt, the value of the transaction is around US$14.6 billion, the companies say, expecting the deal to be closed in 2018, pending regulatory and shareholder approvals.
Under the terms of the transaction, SCANA shareholders will receive 0.6690 shares of Dominion Energy common stock for each share of SCANA common stock-the equivalent of $55.35 per share.
Shortly after the announcement of the proposed merger, SCANA shares were up more than 21 percent pre-market on the NYSE at 8:37 a.m., while Dominion shares were down 5 percent.
South Carolina-based SCANA abandoned last year efforts to build two nuclear units and canceled the twin unit V.C. Summer nuclear project in Jenkinsville, South Carolina.
The agreement between Dominion and SCANA announced today also "calls for significant benefits to SCANA's South Carolina Electric & Gas Company subsidiary (SCE&G) electric customers to offset previous and future costs related to the withdrawn V.C. Summer Units 2 and 3 project," Dominion said.
Those benefits include a US$1.3-billion cash payment within 90 days upon completion of the merger to all customers, worth US$1,000 for the average residential electric customer.
The proposed merger hinges on approvals by SCANA's shareholders, the U.S. Federal Trade Commission (FTC)/the U.S. Department of Justice (DOJ) under the Hart-Scott-Rodino Act, and authorization of the Nuclear Regulatory Commission (NRC), and Federal Energy Regulatory Commission (FERC).
Related: U.S. Rig Count Falls Slightly As Canada's Rig Count Tanks
"SCANA is a natural fit for Dominion Energy," Dominion's chairman, president and CEO, Thomas F. Farrel II, said.
"Joining with Dominion Energy strengthens our company and provides resources that will enable us to once again focus on our core operations and best serve our customers," said Jimmy Addison, chief executive of SCANA.
Upon completion of the merger, the combined company would deliver energy to some 6.5 million regulated customer accounts in eight states and have an electric generating portfolio of 31,400 megawatts and 93,600 miles of electric transmission and distribution lines. The new company would also have a natural gas pipeline network totaling 106,400 miles and would operate one of the largest natural gas storage systems in the U.S. with 1 trillion cubic feet of capacity.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
U.S. Power and NatGas Prices Plummet to Below Zero
Ukrainian Drones Hit Major Rosneft Refinery in Russia
First Niger Oil Bound for China Blocked in West Africa Border Row
Gas Prices Likely to Keep Falling Ahead of Peak Driving Season
Drone Attacks Take Khor Mor Gas Field Offline, Claims Lives