FirstEnergy to acquire Allegheny Energy for $4.7 billion in an all-stock deal
11 Feb 2010
Diversified electric company FirstEnergy Corp, the fifth largest investor-owned electric supplier in the US, today agreed to acquire Allegheny Energy, a supplier of electricity in Pennsylvania, in an all-stock deal worth $4.7 billion.
The proposed acquisition would create one of the largest power distribution company in the US with 24,000 megawatts (MW) of generating capacity, servicing more than six million customers across Pennsylvania, Ohio, Maryland, New Jersey, New York, Virginia and West Virginia.
Under the terms of the deal, shareholders of Greensburg, Pennsylvania-based Allegheny would receive 0.667 shares of FirstEnergy common stock in exchange for each share of Allegheny they own.
Based on the closing stock prices for both companies on 10 February 2010, they would receive a value of $27.65 per share, amounting to $4.7 billion. FirstEnergy will also assume approximately $3.8 billion of Allegheny's debt.
The price per share represents a premium of 31.6 per cent to the closing stock price of Allegheny on 10 February, and a 22.3-per cent premium to the average stock price of Allegheny over the last 60 days ending 10 February 2010.
Following the completion of the merger, FirstEnergy shareholders would own approximately 73 per cent with Allegheny shareholders owning the remaining approximately 27 per cent of the combined company.
