WPS Resources ( WPS) agreed to buy Peoples Energy ( PGL) in a stock swap valued at about $1.59 billion. Under the agreement, each outstanding share of Peoples Energy will be converted into 0.825 share of WPS Resources common stock. This represents a premium of about 15% based on the closing price for Peoples Energy on July 5. WPS Resources' shareholders will own about 57.6% of the combined company, and Peoples Energy shareholders will own about 42.4%. The combined company will be led by Larry L. Weyers, who will serve as its president and CEO. James R. Boris, current lead director for Peoples Energy, will serve as nonexecutive chairman of the board. Thomas M. Patrick, chairman, president and CEO of Peoples Energy, announced his intention to retire earlier this year. The combined company's board will have 16 members, nine selected by WPS Resources and seven by Peoples Energy. The strategic focus for the combined company will be its core regulated electric and natural gas operations, which will serve about 1.6 million natural gas customers and 477,000 electric customers, the company said. The company expects the transaction to add to its calendar year 2008 earnings, excluding residual transition costs, it said. The company said it will be requesting expedited regulatory approval, and if granted, the transaction is expected to be completed by the end of the first calendar quarter of 2007. On Monday, Peoples rose 28 cents to $38.95 and WPS rose 31 cents to $48.29.