Charlotte-based Duke Energy Corp. said today that it is merging with Raleigh-based Progress Energy in a $26 billion deal that will create the largest utility in the U.S.
The combined company, Duke Energy, will be headquartered in Charlotte but “maintain substantial operations in Raleigh,” Duke said. It will serve 7.1 million customers in North Carolina, South Carolina, Florida, Indiana, Kentucky and Ohio.
After the merger, set to take place at the end of this year, Duke CEO Jim Rogers will become executive chairman and Progress CEO Bill Johnson will become president and CEO.
“Our industry is entering a building phase where we must invest in an array of new technologies to reduce our environmental footprints and become more efficient,” Rogers said. “By merging our companies, we can do that more economically for our customers, improve shareholder value and continue to grow.
“Combining Duke Energy and Progress Energy creates a utility with greater financial strength and enhanced ability to meet our challenges head on.”
Under terms of the deal, Progress shareholders will receive 2.6125 shares of Duke common stock in exchange for each share of Progress common stock. Based on the closing price Friday of Duke’s stock, Progress shareholders would receive a $46.48 per share, or $13.7 billion in total value.
Duke will assume approximately $12.2 billion in Progress debt.
Until the merger is approved by shareholders and regulators, the companies will operate as separate entities. The deal cannot go through until the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.