Dominion Energy has agreed to acquire troubled US-based energy firm Scana in a $14.6bn all-stock merger deal including debt.
Under the terms of the merger deal, Scana shareholders will receive 0.6690 shares of Dominion Energy common stock for each share held. Dominion will also fund $1.3bn of cash payouts to residential electric customers.
The two companies said in a joint statement that the deal would provide significant benefits to Scana's South Carolina Electric & Gas Company subsidiary (SCE&G) electric customers by offsetting the previous and future costs related to the scrapped V.C. Summer nuclear Units 2 and 3 expansion project in South Carolina, US.
As per the deal, Dominion agreed to write-off more than $1.7bn of existing V.C. Summer 2 and 3 capital and certain regulatory assets which would reduce customer costs, and also allow completion of the $180m Columbia Energy Center natural-gas fired power station at no cost to customers.
Dominion Energy chairman, president and CEO Thomas F Farrell II said: "The deal would lock in significant and immediate savings for SCE&G customers – including what we believe is the largest utility customer cash refund in history – and guarantee a rapidly declining impact from the V.C. Summer project.”
Upon completion of the deal, which is expected in 2018, Scana would operate as a wholly owned subsidiary of Dominion Energy.
The transaction is subject to receipt of Scana's shareholders approval, clearance from the US Federal Trade Commission (FTC)/the US Department of Justice (DOJ) under the Hart-Scott-Rodino Act, and authorization of the Nuclear Regulatory Commission (NRC) and US Federal Energy Regulatory Commission (FERC).
Farrell added: "Our current operations in the Carolinas – the Dominion Energy Carolina Gas Transmission, Dominion Energy North Carolina and the Atlantic Coast Pipeline – complement Scana's, SCE&G's and PSNC Energy's operations.
“This combination can open new expansion opportunities as we seek to meet the energy needs of people and industry in the Southeast."
The combined company would serve 6.5 million electric and natural gas distribution customers in 18 states. It will have an electric generating portfolio of 31,400MW, 93,600 miles of electric transmission and distribution lines as well as natural gas pipeline network totaling 106,400 miles.
Image: The V. C. Summer Nuclear Station Unit 1 in South Carolina, US. Photo: courtesy of DJSlawSlaw/Wikipedia.