Allegheny Soars on Purchase by FirstEnergy
(Article on FirstEnergy's purchase of Allegheny Energy updated with further merger information, as well as Thursday stock prices for FirstEnergy and Allegheny Energy.)
NEW YORK (
) --
FirstEnergy
(FE) - Get Report
and
Allegheny Energy
( AYE) have announced a stock-for-stock merger.
Shareholders of Allegheny, a utility company, will receive 0.667 a share of FirstEnergy common stock in exchange for each share of Allegheny they own under the deal.
Allegheny shares are valued at $27.65 a share, or $4.7 billion, based on the closing stock prices for both companies on Wednesday. FirstEnergy will also assume about $3.8 billion in Allegheny net debt.
The merger would create a power company with about $16 billion in annual revenue and $1.4 billion in annual earnings. It will also result in ten regulated electric distribution companies providing electric service to more than 6 million customers in Pennsylvania, Ohio, Maryland, New Jersey, New York, Virginia and West Virginia, the companies said in a press release.
Allegheny shares are up 10.5% to at $23.22 in midday Thursday trading; FirstEnergy shares are down 6.0% to at $38.97.
-- Reported by Andrea Tse in New York
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