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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Southern Co | NYSE:SO | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 74.52 | 0 | 12:00:11 |
By Chelsey Dulaney
Southern Co. on Monday struck a deal to buy AGL Resources for about $8 billion, a move to tap into growing demand for natural gas.
The combined company will be the second-largest utility in the U.S. with a customer base of around 9 million, the companies said.
Under the terms of the deal, AGL Resources shareholders will receive $66 in cash for each share held, a 38% premium to AGL's closing price on Friday of $47.86 a share.
Including debt, the deal is valued at $12 billion. Both companies' boards of directors have approved the deal.
Shares of AGL traded recently at $60.72, up 27% but still well below the offer price, while Southern shares dropped 3.3% amid a broad decline in stocks.
Atlanta-based Southern owns electrical utilities throughout the Southeast and has competitive generation, fiber optics and wireless communications businesses. AGL, also based in Atlanta, provides regulated gas distribution and serves retail customers under its SouthStar Energy Services and Pivotal Home Solutions ventures.
The combined company will have around 9 million customers and operate 11 regulated electric and natural gas distribution companies.
Southern Chief Executive Thomas Fanning said the company has been looking to add natural gas distribution and infrastructure to its portfolio for some time now.
In an interview, Mr. Fanning said Southern has made an "enormous" shift away from coal toward natural gas in the past several years amid low prices for natural gas.
The deal will position the company to grow both its gas and renewable energy positions, Mr. Fanning said.
Southern expects the deal to add to its per-share earnings in the first full year after closing, which is expected in the second half of 2016.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 24, 2015 11:33 ET (15:33 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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