Duke Energy and Piedmont Natural Gas have entered into a definitive agreement for Duke Energy to acquire Piedmont for approximately $4.9 billion in cash.
The acquisition will strengthen Duke Energy’s position in natural gas industry in the U.S.
The strategic combination will also help them expand the platform for future growth. Being one of the largest energy companies in the U.S., the combined entity will provide better opportunities to their customers and employees.
Following the acquisition, Piedmont’s employees and one million customers in the Carolinas and Tennessee will join Duke Energy.
However, Piedmont Natural Gas will retain its name, operate as a business unit of Duke Energy and maintain its significant presence and its headquarters in Southeast Charlotte.
Piedmont Natural Gas began operations in 1951 in Charlotte and Duke Energy was founded in the city in 1904.
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.
Upon transaction closing, Piedmont shareholders will receive $60 in cash for each share of Piedmont Natural Gas common stock. This represents an approximate 40 percent premium to Piedmont’s Oct. 23, 2015, closing stock price.
Duke Energy will also assume approximately $1.8 billion in Piedmont Natural Gas existing net debt, representing a total enterprise value of approximately $6.7 billion.
A fully underwritten bridge facility is in place with Barclays to complete the transaction. Duke Energy will finance the transaction with a combination of debt, between $500 million and $750 million of newly issued equity and other cash sources.
Duke Energy will add one member of Piedmont’s board of directors to its board after the transaction is closed.
An existing member of Piedmont’s management team will lead Duke Energy’s natural gas operations in the Carolinas, Tennessee, Ohio and Kentucky, and report to Good.
Completion of the transaction is conditioned upon approval by the North Carolina Utilities Commission, expiration or termination of any applicable waiting period under the federal Hart-Scott-Rodino Antitrust Improvements Act of 1976, and Piedmont shareholder approval.
The companies also will provide information regarding the acquisition to the Public Service Commission of South Carolina and the Tennessee Regulatory Authority.