Allegheny Soars on Purchase by FirstEnergy - TheStreet

(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 (

TheStreet

) --

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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