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Dominion Energy To Buy Scana In $7.9 Bln All-stock Deal


Electric utilities Dominion Energy, Inc. (D) and Scana Corp. (SCG) said Wednesday that they have agreed to combine in a stock-for-stock merger valued at about $7.9 billion.

Including assumption of debt, the transaction is valued at about $14.6 billion. Shares of Scana are gaining more than 26 percent in pre-market activity following the news.

Under the terms of the deal, Scana common shareholders would receive 0.6690 shares of Dominion Energy common stock for each share of Scana common stock held, equating to a value of about $55.35 per share.

The agreement also calls for significant benefits to Scana's South Carolina Electric & Gas Co. subsidiary or SCE&G electric customers to offset previous and future costs related to the withdrawal of operating licenses for the unfinished V.C. Summer nuclear reactors, following the bankruptcy of Westinghouse Electric.

The benefits includes a $1.3 billion cash payment within 90 days upon completion of the merger to all SCE&G customers, worth $1,000 for the average residential electric customer.

In addition, more than $1.7 billion write-off of existing V.C. Summer Units 2 and 3 capital and regulatory assets would never be collected from customers. Further, a $180 million purchase of natural-gas fired power station, Columbia Energy Center, will be done at no cost to customers to fulfill generation needs.

The deal will also result in an estimated additional 5 percent rate reduction from current levels, equal to more than $7 a month for a typical SCE&G residential customer.

On completion of the merger, the combined company would operate in 18 states, delivering energy to approximately 6.5 million regulated customer accounts in eight states. It will have an electric generating portfolio of 31,400 megawatts and 93,600 miles of electric transmission and distribution lines.

The combined company also would have a natural gas pipeline network totaling 106,400 miles and operate natural gas storage systems with 1 trillion cubic feet of capacity.

While Scana will operate as a wholly owned subsidiary of Dominion Energy, it will maintain its local management structure and the headquarters of its SCE&G utility in South Carolina.

Dominion Energy noted that the transaction will be accretive to its earnings upon closing, which is expected in 2018. The merger also would increase its compounded annual earnings-per-share target growth rate through 2020 to 8 percent or higher.

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