This Day On The Street
Continue to site
ADVERTISEMENT
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

Duke, Progress Energy Clear Merger Hurdle

By Meg Kinnard, Associated Press

COLUMBIA, S.C. -- After more than year of wrangling over competition concerns, federal regulators have cleared Duke Energy's (DUK) proposed takeover of Progress Energy (PGN), a deal that will create the nation's largest electric utility.

The Federal Energy Regulatory Commission's ruling, issued Friday, does impose some additional conditions on the merger, including requiring regular status updates on transmission upgrades. FERC stipulated that the upgrades must be completed by June 2015 and not charged to wholesale customers.

The companies have 15 days to say if they will accept the latest conditions and proceed. On Saturday, both Duke and Progress said that they are reviewing the FERC's latest order while pursuing necessary approvals from state regulators in North and South Carolina. The companies hope to complete the deal by July.

"We are pleased that FERC has issued all merger-related orders within the timeframe requested by the companies," Duke and Progress said in identical statements issued Saturday.

> > Bull or Bear? Vote in Our Poll

Duke Energy offered to purchase Raleigh, N.C.-based Progress in January 2011 for stock then valued at $13.7 billion. But Duke's share price has risen substantially since then. At current prices, Progress shareholders would receive $60.48 worth of stock for each share held, for a total value of $17.9 billion based on the company's 296 million shares outstanding. Charlotte-based Duke Energy also will assume about $12.2 billion in debt.

The combined utility would serve 7 million customers in the Carolinas, Florida, Indiana, Ohio and Kentucky. Shareholders approved the merger in August.

But FERC twice rejected the deal over concerns that it would reduce competition for wholesale electricity in the Carolinas. In September, the FERC suggested that Duke and Progress consider selling power plants, building new transmission lines, or giving up control of their transmission system to a regional operator.

The companies responded by offering to sell excess electricity at a fixed price to wholesale buyers in their Carolinas territories, but regulators said that didn't go far enough. In March, the companies said they would spend $110 million to build new power transmission lines or enhance existing ones, in order to increase the electricity that can flow into the Carolinas from outside suppliers.

Last month, Duke and Progress also agreed not to ask customers to cover millions of dollars in severance costs to employees who could be laid off as part of the merger. Duke and Progress agreed to swallow the severance costs and also promised to cut retail rates by $70 million.
Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $126.60 0.94%
FB $86.91 1.34%
GOOG $521.84 0.26%
TSLA $269.15 0.33%
YHOO $39.33 0.10%

Markets

DOW 17,757.91 +138.40 0.79%
S&P 500 2,077.42 +14.31 0.69%
NASDAQ 5,013.1230 +26.2560 0.53%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs