Dominion Energy Inc. (NYSE: D) announced on Wednesday its agreement to acquire SCANA Corporation (NYSE: SCG) for a total of $7.9 billion, in which SCANA will operate as a wholly owned subsidiary under Dominion.
SCANA shareholders will receive 0.6690 shares of Dominion Energy common stock for each share of SCANA owned, or $55.35 per share. Including assumption of debt, the total value of the transaction is $14.6 billion.
SCANA shares were up 22 percent on Wednesday.
The agreement also brings benefits to SCANA’s customers because it had halted its V.C. Summer Units 2 and 3 project in late July.
After the closing of the transaction, a $1.3 billion cash payment will be given to all customers, worth about $1,000 per average residential electric customer. The acquisition will also include a 5 percent rate reduction from currently levels, equaling more than $7 a month for SCE&G customers, more than a $1.7 billion write-off of existing V.C. Summer 2na d 3 capital and regulatory assets, and a completion of the $180 million purchase of power station at no cost to customers.
"SCANA is a natural fit for Dominion Energy," Thomas Farrell, II, chairman, president and chief executive officer of Dominion Energy, “This combination can open new expansion opportunities as we seek to meet the energy needs of people and industry in the Southeast."
"Joining with Dominion Energy strengthens our company and provides resources that will enable us to once again focus on our core operations and best serve our customers,” said Jimmy Addison, chief executive officer of SCANA.
Once the merger is completed, the two will operate in 18 states across the nation. The company will deliver energy to approximately 6.5 million customers and have an electric generating portfolio of 31,400 megawatts and 93,600 miles of electric transmission and distribution lines.
The merger also would increase Dominion Energy's compounded annual earnings-per-share target growth rate through 2020 to 8 percent or higher.