This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Big Deals That May Flop in 2012

3. Duke Energy's $13.7 billion Acquisition of Progress Energy.

In Jan. 2011, Duke Energy (DUK - Get Report) said it will buy Progress Energy (PGN) for $13.7 billion creating a regional energy behemoth in the Carolina's, serving 7.1 million customers in Southeastern states. The deal still hasn't closed on antitrust concerns.

The value of the all stock deal has increased with Duke Energy's over 20% stock gain in 2011, but the deal is facing scrutiny that may threaten Progress's gains.

In December, the Federal Energy Regulatory Commission blocked the merger, delaying its close into 2012 on grounds that the tie-up would be harmful to energy market competition in North and South Carolina, where both companies have a significant presence.

After a Duke and Progress Energy proposed 8-year power selling agreement to mitigate concentration issues in the Carolinas was submitted in October, the FERC rejected the plan, calling it "flawed" and leaving key anticompetitive pricing threats unaddressed. However, the rejection of the proposal was not an outright veto of the merger.

Even after the FERC order, which has delayed the merger close from 2011, Duke and Progress are committed to the merger. "The companies are planning to submit a revised mitigation proposal as soon as the analysis of the commission's order is complete," said Duke and Progress in response to the FERC order. In a recent filing, Progress Chief Executive Bill Johnson said he expects the merger to close in June, pending regulatory approvals.

The companies will now need to resubmit a divestiture plan and have it accepted ahead of a July 8 termination date. As late as October, company officials had said the merger would close in 2011.

Previous to the December regulatory stoppage, the merger had received approvals from the U.S. Department of Justice, the U.S. Nuclear Regulatory Commission and the Federal Communications Commission, among other approvals, which also include the shareholders of both companies.

Divestitures still are a key to utilities mergers, which can create regional powerhouses. In December, the DoJ and other regulators approved the merger between Constellation Energy (CEG) and Exelon (EXC) that would create a mid-Atlantic energy titan. That deal will now looks more likely to close in 2012, pending the divestiture of three power plants.

For more on utilitity stocks, see TheStreet's portfolio of the highest yielding utility stocks.
4 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
PGN $0.35 0.03%
MHS $70.30 0.00%
CMC $18.02 0.56%
CLX $126.96 1.38%
CVS $101.45 0.95%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs