Duke Energy to acquire rival Piedmont in $4.9bn deal

Duke Energy was set to take over Piedmont Natural Gas to become the 15th largest local distribution natural gas company in the US.

The Charlotte, North Carolina-based company put the value of the all-cash transaction at $4.9bn.

Duke would shell out $60 a share – for a 40% premium – and assume $1.8bn in net debt as part of the transaction, for a total enterprise value of $6.7bn, the company said in a statement.

Lynn Good, president and CEO of Duke Energy, said: "This combination provides us with a growing natural gas platform, benefitting our customers, communities and investors."

Duke was to finance the deal through a combination of debt, between $500m and $750m of newly issued equity and other cash sources, management said in a statement.

Piedmont Natural Gas would retain its name and an existing member of Piedmont’s management team would lead Duke Energy’s natural gas operations in the Carolinas, Tennessee, Ohio and Kentucky.

Both companies were aiming to close the transaction by the end of 2016.

The combined firm would have approximately 1.5m natural gas customers, 32,000 miles of natural gas pipelines, 7.3m electric customers and 31,100 staff.

As of 14:06 shares in Piedmont Energy were changing hands at $57.98, 37.28% higher than Friday’s close.

Stock in its suitor, Duke Energy, was down by 1.82% to $72.40 in NYSE trading.