Duke Energy To Buy Piedmont Natural Gas For About $4.9 Bln

(RTTNews) - Power producer Duke Energy Corp. (DUK) has agreed to acquire natural gas distributor Piedmont Natural Gas Inc. (PNY) for about $4.9 billion in cash, the two companies said Monday. The acquisition of Piedmont will provide Duke Energy with a growing natural gas platform.

The boards of directors of both companies have unanimously approved the transaction. Upon closing, Piedmont shareholders will receive $60 in cash for each Piedmont share, representing an almost 40 percent premium to Piedmont's closing stock price on October 23.

Duke Energy joins other power companies in the U.S. and Canada that are expanding their natural gas infrastructure amid weakening demand for electricity.

Southern Co. (SO) said in late August that it has agreed to acquire natural gas distributor AGL Resources, Inc. (GAS) in an all-cash deal valued at about $8 billion, or $12 billion, including debt.

Canadian power company Emera Inc. (EMA.TO) has agreed to buy U.S. electric and gas utility Teco Energy Inc. (TE) for about $10.4 billion, including the assumption of nearly $3.9 billion of debt.

Duke Energy said it will assume about $1.8 billion in Piedmont's existing net debt, with the deal representing a total enterprise value of about $6.7 billion. The transaction, which requires approval by Piedmont shareholders, is expected to be completed by the end of 2016.

Piedmont began operations in 1951 in Charlotte and Duke Energy was founded in the city in 1904. Duke Energy's regulated utility operations serving about 7.3 million electric customers located in six states in the Southeast and Midwest.

Piedmont distributes natural gas to more than one million residential, commercial, industrial and power-generation utility customers in portions of North Carolina, South Carolina and Tennessee.

Duke Energy and Piedmont also are key partners in the $5 billion Atlantic Coast Pipeline that will be the first major natural gas pipeline to serve Eastern North Carolina.

Piedmont will retain its name, operate as a business unit of Duke Energy and maintain its headquarters in Southeast Charlotte after the deal closes. Duke Energy will add one member of Piedmont's board of directors to its board after closing.

DUK closed Friday's trading at $73.74, down $1.32 or 1.76 percent on a volume of 2.06 million shares.

PNY closed Friday's trading at $42.22. In Monday's pre-market activity, the stock is up $14.78 or 35.01 percent to $57.00.