Akron, Ohio based FirstEnergy is buying Greensburg based Allegheny Energy, Inc. The boards of directors of both companies have unanimously approved a stock-for-stock transaction. Allegheny shareholders would receive 0.667 shares of FirstEnergy common stock in exchange for each share of Allegheny they own. Based on yesterday’s closing price that is more than a 30% premium per share and it puts a value on Allegheny Energy of $4.7 billion. Allegheny shareholders would own approximately 27% of the combined company. FirstEnergy spokesperson Scott Surgeoner says the deal is expected to take 12-14 months to complete. It is pending regulatory approval from all of the states involved and a few federal entities. The combined company will be headquartered at FirstEnergy’s home base of Akron and Surgeoner says it is unclear at this time what will happen to Allegheny Energy’s Greensburg office. He says a team of top management from both companies will be gathered to guide the transition and answer those types of questions. Surgeoner says the new company will have approximately $16 billion in annual revenues, operate ten electric distribution companies servicing more than six million customers, and nearly 20,000 miles of high-voltage transmission lines. The production assets have approximately 24,000 megawatts of generating capacity. Surgeoner says the companies have contiguous service areas and fit well together in other ways. He says for customers, the merger should be seamless.
Service area images (Allegheny Energy left, FirstEnergy right) from company websites.