Dominion Resources To Acquire Questar In $4.4 Bln Deal

(RTTNews) - Dominion Resources, Inc. (D) has agreed to acquire natural gas company Questar Corp. (STR) in an all-cash transaction valued at about $4.4 billion, the two companies said Monday. Dominion noted that Questar would provide enhanced geographic diversity to its natural gas operations.

Under the terms of the deal, Dominion has agreed to pay Questar shareholders $25 in cash for each share of Questar common stock held by them and also assume Questar's outstanding debt. The transaction requires approval of Questar's shareholders. The offer price represents a 22.6 percent premium to Questar's closing stock price of $20.39 on Friday.

Dominion said that the transaction would be accretive to it upon closing - expected by year-end 2016 - with limited impact on the company's balance sheet.

The company intends to finance the transaction in a manner that supports its existing credit ratings targets, using equity, mandatory convertibles and debt at Dominion, and equity at Dominion Midstream Partners, LP (DM).

The Dominion-Questar combination also is expected to support Dominion's 2017 earnings growth rate and allow the company to reach the top of or exceed its 2018 growth targets.

Salt Lake City, Utah-based Questar is a natural gas distribution, pipeline, storage and cost-of-service gas supply company. It serves nearly 1 million homes and businesses in Utah, Wyoming and Idaho, with about 97 percent of those customer accounts in Utah.

The combined company would serve about 2.5 million electric utility customers and 2.3 million gas utility customers in seven states. It also would operate more than 15,500 miles of natural gas transmission, gathering and storage pipelines, one of the nation's largest natural gas storage systems, and approximately 24,300 megawatts of generation.

Separate from this transaction, Dominion has committed about $1 billion for three solar generating facilities located in Beaver, Iron and Millard counties, Utah. These solar facilities are backed by long-term power purchase agreements with local electric utilities.