Duke Energy and Progress Energy are to merge in a move that will create the largest utility company in the US.

In a statement yesterday, it was announced that both companies’ boards of directors unanimously approved a definitive merger agreement to combine the two companies in a stock-for-stock transaction. The new company, to be called Duke Energy, will have a combined enterprise value of $64B and $37B in market capitalization, and will have the country’s largest regulated customer base, providing service to approximately 7.1 million electric customers in six regulated service territories North Carolina, South Carolina, Florida, Indiana, Kentucky and Ohio.

The company will have approximately 57GWh of domestic generating capacity from a diversified mix of coal, nuclear, natural gas, oil and renewable resources, and will have the largest regulated nuclear fleet in the country.

“Our industry is entering a building phase where we must invest in an array of new technologies to reduce our environmental footprints and become more efficient,” said Jim Rogers, chairman, president and chief executive officer of Duke Energy. “By merging our companies, we can do that more economically for our customers, improve shareholder value and continue to grow.

“Combining Duke Energy and Progress Energy creates a utility with greater financial strength and enhanced ability to meet our challenges head-on.”

“This combination of two outstanding companies is a natural fit,” added Bill Johnson, chairman, president and chief executive officer of Progress Energy. “It makes clear strategic sense and creates exceptional value for our shareholders. Together, we can leverage our best practices to achieve even higher levels of safety, operational excellence and customer satisfaction, and save money for customers by combining our fuel purchasing power and the dispatch of our generating plants.”

Under the terms of the merger agreement, Progress Energy’s shareholders will receive 2.6125 shares of common stock of Duke Energy in exchange for each share of Progress Energy common stock. Based on Duke Energy’s closing share price on Jan. 7, 2011, Progress Energy shareholders would receive a value of $46.48 per share, or $13.7B in total equity value. Duke Energy will also assume approximately $12.2Bin Progress Energy net debt.

Following completion of the merger, officials anticipate Duke Energy shareholders will own approximately 63% of the combined company with Progress Energy shareholders owning approximately 37% on a fully diluted basis.

The new company will be led by Bill Johnson as president and chief executive, and Jim Rogers as executive chairman. Both will serve on the board of directors, which will be composed of 18 members, with 11 designated by Duke Energy’s board of directors and seven designated by Progress Energy’s board of directors.

Until the merger has received all necessary approvals and has closed, the companies will continue to operate as separate entities.