Duke Energy to acquire Progress Energy for $13.7-bn

In a much-awaited consolidation move in the US energy sector, utility major Duke Energy Corp agreed to buy rival Progress Energy Inc for approximately $13.7 billion in an all-stock deal that would create the largest utility company in the US with a combined market capitalisation of over $36 billion.

Under the terms, the shareholders of Progress Energy will get 2.6125 Duke Energy shares for each of their shares, valuing the company at around $13.7 billion or $46.48 per share.

The offer price represents around 4-per cent premium to Progress Energy, based on the closing share prices of both the companies Friday on the New York Stock Exchange.

As part of the deal, Duke Energy will assume Progress Energy' $12.2 billion debt. The company also plans a reverse stock split before the closing of the transaction.

The proposed merger of the two North Carolina-based energy companies would create a utility giant, with a total power generation capacity of 57,000 MW and approximately 7.1 million customers spread over six states; North and South Carolina, Florida, Indiana, Kentucky, and Ohio.

Duke Energy's chairman, president, and chief executive officer Jim Rogers said, ''Combining Duke Energy and Progress Energy creates a utility with greater financial strength and enhanced ability to meet our challenges head-on.''