Pennsylvania-based Peoples Natural Gas has agreed to acquire Kentucky’s natural gas distributor Delta Natural Gas.
Under the deal, Delta shareholders will get $30.50 in cash per share, representing a premium of 17% to its closing share price on 17 February.
Based in Winchester, Delta Natural Gas provides natural gas services to around 36,000 customers in Kentucky. The company operates facilities in 23 counties in central and southeastern Kentucky.
Delta’s non-regulated subsidiary firms include Delta Resources, Deltagasco, and Enpro, which buy and sell gas, as well as operate production properties.
Once the deal concludes, Delta will become wholly-owned subsidiary of PNG Companies, the parent of Peoples. Kentucky Public Service Commission will continue to regulate Delta.
Subject to customary closing conditions, the deal is expected to complete by the end of this year.
Delta Natural Gas board chairman, president and CEO Glenn Jennings said: “Peoples, like Delta, is a highly regarded natural gas distribution company and it shares Delta’s values, particularly our commitment to customer service and creating a great place for our employees to work.
“Our Board of Directors has considered the opportunity carefully and believes merging with Peoples is in the best interests of Delta’s shareholders, customers, employees and the communities we serve.”
Peoples president and CEO Morgan O’Brien said: “We will implement Peoples’ state of the art technology solutions for the customers of Delta and support community based organizations and initiatives throughout central and eastern Kentucky.”
Based in Pittsburgh, Peoples provides natural gas services to around 700,000 customers in Pennsylvania. It is controlled by SteelRiver Infrastructure Fund North America.