Utility buys rival to boost power
By Mark Williams |
February 12, 2010, Friday
|
Print Edition
Print Edition
UTILITY company FirstEnergy yesterday said it is buying rival Allegheny Energy for about US$4.7 billion in stock in a deal that will create one of the largest power companies in the United States.
The combined company will have about US$16 billion in annual revenue and US$1.4 billion in net profit and serve more than 6 million customers in the country's seven eastern states.
"The combination of our companies is a natural fit that will accelerate our efforts to strengthen the operating performance of our generating fleet while building on our long-standing dedication to customers, shareholders and employees," Anthony J. Alexander, president and CEO of FirstEnergy, said in a statement.
Alexander will remain the top executive of the combined company, which will be based at FirstEnergy's headquarters in Akron, Ohio.
The deal is expected to close within 14 months.
Shareholders of Allegheny, based in Greensburg, Pennsylvania, will receive 0.667 share of FirstEnergy common stock in exchange for each share they own.
Based on Tuesday's closing price, those shares will be valued at US$27.65 and represent a 32 percent premium over Allegheny's closing price of US$21.02 on Wednesday.
The combined company will have about US$16 billion in annual revenue and US$1.4 billion in net profit and serve more than 6 million customers in the country's seven eastern states.
"The combination of our companies is a natural fit that will accelerate our efforts to strengthen the operating performance of our generating fleet while building on our long-standing dedication to customers, shareholders and employees," Anthony J. Alexander, president and CEO of FirstEnergy, said in a statement.
Alexander will remain the top executive of the combined company, which will be based at FirstEnergy's headquarters in Akron, Ohio.
The deal is expected to close within 14 months.
Shareholders of Allegheny, based in Greensburg, Pennsylvania, will receive 0.667 share of FirstEnergy common stock in exchange for each share they own.
Based on Tuesday's closing price, those shares will be valued at US$27.65 and represent a 32 percent premium over Allegheny's closing price of US$21.02 on Wednesday.
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