Duke Energy Buying NatGas Distributor for Nearly $5 Billion Cash

Duke Energy Buying NatGas Distributor for Nearly $5 Billion Cash

The country’s largest power company announced Monday its involvement in a nearly $5 billion cash transaction for a natural gas distributor.

The boards of directors for Duke Energy and Piedmont Natural Gas unanimously approved the $4.9 billion deal, expected to close by the end of 2016.

“We look forward to welcoming Piedmont’s employees and one million customers in the Carolinas and Tennessee to Duke Energy,” said Lynn Good, president and chief executive officer of Duke Energy.  “This combination provides us with a growing natural gas platform, benefitting our customers, communities and investors.”

Duke Energy was founded in Charlotte, North Carolina in 1904.  Less than 50 years later, in 1951, Piedmont Natural Gas began operations.  Together, the companies helped establish the Charlotte region as an energy industry hub.

“This is an exciting moment for Piedmont Natural Gas, its shareholders, customers and employees,” said Tom Skains, chairman, president and chief executive officer of Piedmont Natural Gas.  “The strategic combination of our two companies will deliver compelling value to our shareholders, greatly expand our platform for future growth, enhance our ability to provide excellence in customer service and give our employees more opportunities in one of the largest energy companies in the United States.”

Under the conditions of the acquisition, Piedmont Natural Gas shareholders will receive $60 cash for each share of common stock and Duke Energy will assume about $1.8 billion of Piedmont’s existing net debt, representing a total enterprise value of about $6.7 billion.

One member of Piedmont's board of directors will sit on Duke's board after the transaction is complete, and an existing member of Piedmont's management team will lead Duke's natural gas operations in the Carolinas, Tennessee, Ohio and Kentucky.

Piedmont Natural Gas will retain its name and operate as a business unit of Duke Energy, maintaining its headquarters in southeast Charlotte.

Duke plans to finance the deal with a combination of debt between $500 million and $750 million of newly-issued equity and other cash sources.  The companies will continue operating as separate entities until the transaction is closed.

Duke Energy and Piedmont Natural Gas are also partners in the $5 billion Atlantic Coast Pipeline, which will be the first major natural gas pipeline to serve eastern North Carolina.

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