NextEra Energy, Inc. and Dominion Energy, Inc. have agreed to combine in an all-stock transaction that would create the world’s largest regulated electric utility by market capitalization, the companies announced Monday.
The deal is valued at $66.8 billion, according to Yahoo! Finance.
NextEra Energy is the majority owner of the Duane Arnold Energy Center near Palo, and is seeking authorization to restart the 612-megawatt nuclear energy plant.
Under terms of the agreement, Dominion Energy shareholders will receive 0.8138 shares of NextEra Energy for each Dominion Energy share they hold at closing, resulting in NextEra Energy shareholders owning approximately 74.5% of the combined company and Dominion Energy shareholders owning approximately 25.5%. Dominion Energy shareholders will also receive a one-time cash payment of $360 million at closing and will continue to receive Dominion’s current quarterly dividend through the close of the transaction.
The combined company would operate under the NextEra Energy name and trade on the New York Stock Exchange under the ticker symbol NEE. It would serve approximately 10 million utility customer accounts across Florida, Virginia, North Carolina and South Carolina and own 110 gigawatts of generation capacity. More than 80% of combined operations would be regulated.
John Ketchum will serve as chairman and chief executive officer of the combined company. Robert Blue will serve as president and CEO of regulated utilities and as a member of the board of directors. Edward Baine will be president and CEO of Dominion Energy Virginia, Keller Kissam will be president and CEO of Dominion Energy South Carolina and Scott Bores will be president and CEO of Florida Power & Light Company.
The companies said they plan to maintain dual headquarters in Juno Beach, Fla., and Richmond, Va., along with Dominion Energy South Carolina’s existing operational headquarters in Cayce, S.C. Dominion Energy’s utility subsidiaries — Dominion Energy Virginia, Dominion Energy North Carolina and Dominion Energy South Carolina — would retain their names.
As part of the transaction, the companies are proposing $2.25 billion in bill credits for Dominion Energy customers in Virginia, North Carolina and South Carolina, to be distributed over two years following the close of the deal.
“This is a historic moment for our two companies and for the states we are privileged to serve,” Mr. Ketchum said. “Electricity demand is rising faster than it has in decades. Projects are getting larger and more complex. Customers need affordable and reliable power now, not years from now. We are bringing NextEra Energy and Dominion Energy together because scale matters more than ever — not for the sake of size, but because scale translates into capital and operating efficiencies.”
Mr. Blue said the combination reflects a shared commitment to customers and communities.
“This combination brings together two strong operating platforms and creates an even stronger energy partner for Virginia, North Carolina, South Carolina and Florida, with the scale and balance sheet to deliver the generation, transmission and grid investments our customers and economies need,” Mr. Blue said.
The combined company’s rate base would be approximately $138 billion, with roughly 11% annual growth projected through 2032. The companies expect adjusted earnings per share growth of more than 9% annually through 2032 and project the deal will be immediately accretive to adjusted earnings per share at closing.
The transaction has been unanimously approved by both companies’ boards of directors. It is expected to close in 12 to 18 months, subject to shareholder approval from both companies, antitrust clearance under the Hart-Scott-Rodino Act, approval from the Federal Energy Regulatory Commission and the Nuclear Regulatory Commission, and state regulatory approvals from the Virginia State Corporation Commission, the North Carolina Utilities Commission and the Public Service Commission of South Carolina.
The combined company’s board would include 10 directors from NextEra Energy and four from Dominion Energy.
The companies also announced commitments to retain Dominion Energy’s approximately 15,000 current employees, including current compensation and benefits, and to increase charitable giving by $10 million annually for five years.
Kirkland & Ellis LLP served as legal counsel and Lazard acted as lead financial adviser to NextEra Energy, with Bank of America and Wells Fargo also serving as financial advisers. McGuire Woods LLP served as legal counsel and Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC acted as co-financial advisers to Dominion Energy.
NextEra Energy, headquartered in Juno Beach, Fla., owns Florida Power & Light Company and NextEra Energy Resources, LLC. Dominion Energy, headquartered in Richmond, Va., provides regulated electricity service to 3.6 million customers in Virginia, North Carolina and South Carolina, and regulated natural gas service to 500,000 customers in South Carolina.
