Duke Energy to Acquire Piedmont Natural Gas for $4.9 Billion in Cash
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Establishes an attractive natural gas growth platform that expands Duke Energy's capabilities for customers
Transaction expected to be accretive to Duke Energy's adjusted earnings per share (EPS) in first full year post-closing
Enhances Duke Energy's long-term 4 to 6 percent earnings per share growth rate target
CHARLOTTE, N.C. - Duke Energy and Piedmont Natural Gas today announced the boards of directors of both companies have unanimously approved a definitive agreement for Duke Energy to acquire Piedmont for approximately $4.9 billion in cash.
"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 CEO of Duke Energy. "This combination provides us with a growing natural gas platform, benefitting our customers, communities and investors."
"This is an exciting moment for Piedmont Natural Gas, its shareholders, customers and employees," said Tom Skains, chairman, president and CEO 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."
Piedmont Natural Gas began operations in 1951 in Charlotte and Duke Energy was founded in the city in 1904. Both companies have played leading roles in supporting economic development in the Carolinas and establishing the Charlotte region as a major hub for energy companies.
Duke Energy and Piedmont also are key partners in the $5 billion Atlantic Coast Pipeline that will be the first major natural gas pipeline to serve Eastern North Carolina.
Terms and leadership
Upon transaction closing, Piedmont shareholders will receive $60 in cash for each share of Piedmont Natural Gas common stock. This represents an approximate 40 percent premium to Piedmont's Oct. 23, 2015, closing stock price.
Duke Energy will also assume approximately $1.8 billion in Piedmont Natural Gas existing net debt, representing a total enterprise value of approximately $6.7 billion.
A fully underwritten bridge facility is in place with Barclays to complete the transaction. Duke Energy will finance the transaction with a combination of debt, between $500 million and $750 million of newly issued equity and other cash sources.
Piedmont Natural Gas will retain its name, operate as a business unit of Duke Energy and maintain its significant presence and its headquarters in Southeast Charlotte. Duke Energy and Piedmont will maintain their current levels of community involvement and charitable giving.
Duke Energy will add one member of Piedmont's board of directors to its board after the transaction is closed. An existing member of Piedmont's management team will lead Duke Energy's natural gas operations in the Carolinas, Tennessee, Ohio and Kentucky, and report to Good.
Approvals and timing
Completion of the transaction is conditioned upon approval by the North Carolina Utilities Commission, expiration or termination of any applicable waiting period under the federal Hart-Scott-Rodino Antitrust Improvements Act of 1976, and Piedmont shareholder approval.
The companies also will provide information regarding the acquisition to the Public Service Commission of South Carolina and the Tennessee Regulatory Authority.
The companies are targeting a closing by the end of 2016.
The companies will continue to operate as separate entities until the transaction is completed.
Advisors
Barclays served as the exclusive financial advisor to Duke Energy. Goldman Sachs Co. served as the exclusive financial advisor to Piedmont Natural Gas. Sidley Austin LLP served as legal counsel to Duke Energy and Kirkland Ellis LLP served as legal counsel to Piedmont Natural Gas.
See fact sheet (http://www.duke-energy.com/pdfs/png-factsheet.pdf) for specific transaction and company details.
Conference call and webcast
A conference call will be conducted at 8:30 a.m. ET today to discuss the acquisition. The conference call will be hosted by Duke Energy management.
The call can be accessed via the investors' section (http://www.duke-energy.com/investors/) of Duke Energy's website or by dialing 877-447-0294 in the United States. Please use conference code 2604 and PIN 4044935. Please call in five to 10 minutes prior to the scheduled start time.
A replay and transcript will be available by accessing the investors' section of the company's website.
About Duke Energy
Duke Energy is the largest electric power holding company in the United States. Its regulated utility operations serve approximately 7.3 million electric customers located in six states in the Southeast and Midwest. Its commercial power and international energy business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.
Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at www.duke-energy.com.
About Piedmont Natural Gas
Piedmont Natural Gas is an energy services company primarily engaged in the distribution of natural gas to more than one million residential, commercial, industrial and power-generation utility customers in portions of North Carolina, South Carolina and Tennessee, including customers served by municipalities that are wholesale customers. Its subsidiaries are invested in joint venture, energy-related businesses, including unregulated retail natural gas marketing, regulated interstate natural gas transportation and storage, and regulated intrastate natural gas transportation businesses. More information about Piedmont Natural Gas is available at www.piedmontng.com.
Media Contact: Tom Williams, Duke Energy
24-Hour: 800.559.3853
Analysts: Bill Currens, Duke Energy
Office: 704.382.1603
Media Contact: David Trusty, Piedmont Natural Gas
704.731.4391
Analysts: Nick Giaimo, Piedmont Natural Gas
Office: 704.731.4952
SOURCE Duke Energy
Web Site: http://www.duke-energy.com Â
