British company

National Grid

(NGG) - Get Report

said it will buy

Niagara Mohawk

( NMK) in a cash and stock deal worth $3 billion.

Following the purchase of Niagara Mohawk, National Grid will be the ninth largest electric utility in the U.S.

The acquisition, which will be made through the formation of a new holding company called New National Grid, will be the company's third buy in the U.S. this year. It earlier bought

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Terms of the deal call for Niagara Mohawk shareholders to receive $19 a share in cash or American Depositary Shares, or a combination of both.

Niagara Mohawk has more than 1.5 million electricity customers and more than 540,000 gas customers in New York State. For the year ended Dec. 31, Niagara Mohawk posted earnings before interest, tax depreciation and amortization of $1.3 billion on sales of $4.1 billion. National Grid said it will have annual savings of $90 million following the deal.

The deal, which is expected to close by late 2001, is subject to regulatory and shareholder approval as well as "other satisfactory arrangements" being reached, including the sale of Niagara Mohawk's nuclear facilities.

It comes on the heels of several recent deals that consolidate the power industry.