Northeast Utilities to buy rival NSTAR for $4.17 billion
19 Oct 2010
Fortune 500 electricity and natural gas provider in the US, Northeast Utilities (NU), yesterday agreed to buy its rival NSTAR for $4.17 billion to create one of the largest utilities in the US, with a total enterprise value of $17.5 billion.
NSTAR, headquartered in Boston, is an energy delivery company with annual revenues of approximately $3 billion and assets of $8 billion and serves 1.4 million customers in Massachusetts, including approximately 1.1 million electric distribution customers in 81 communities and 300,000 natural gas distribution customers in 51 communities.
Connecticut-based NU operates New England's largest utility system with annual revenues of approximately $5.4 billion and assets of $14.2 billion. NU operates in Connecticut, New Hampshire and Massachusetts and serves more than 2.1 million electric and natural gas customers in nearly 500 cities and towns.
Under the deal, NSTAR shareholders would receive 1.312 NUs common shares for each NSTAR share that they own in a transaction with a total equity value of $9.5 billion and an enterprise value of $17.5 billion.
Post merger, shareholders of NU would own approximately 56 per cent and NSTAR shareholders would own the rest of the combined company.
The combined company will operate six regulated electric and gas utilities in three states and will have nearly 3.5 million electric and gas customers. NU will have nearly 4,500 miles of electric transmission lines, 72,000 miles of electric distribution lines and 6,000 miles of gas distribution lines.
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