American power and energy company, Dominion Energy, Inc., is ready to buy southern utility SCANA Corporation. Dominion said on Wednesday the purchase will be in all-stock deal valued at US$7.9bn.
The offer from the Virginia-based utility giant will conciliate angered investors and customers after SCANA scrapped the costly V.C. summer nuclear project. The incomplete expansion of the project has received a lot of criticism.
Guggenheim Securities analyst Shahriar Pourreza on Reuters, said, “SCANA does not have any other option and regulators will be aware of that, so the deal is likely to go through but it will be noisy.”
Dominion has promised to deliver reduced electric rates and provide a partial refund of the cost to SCANA’s ratepayers. The company will pay the customers US$1.3bn. It will estimate to US$1000 for each customer.
Based on the Dominion’s stock price of the last 30 trading days, the company offers 0.6690 of its shares for each SCANA share.
According to The Post and Courier, SCANA chief executive Jimmy Addison said the deal has “greatly reduced” the cost customers would bear after the project was stalled.
SCANA is a US$5bn energy-based holding company that owns the South Carolina Electric & Gas Co (SCE&G). Soon, the company will become a subsidiary of Dominion.
However, Dominion chief executive Thomas Farrell, said if lawmakers or regulators make a move that leads to “adverse economic consequences,” the deal could be withdrawn by the company. “If it’s insufficient to South Carolina, then we won’t transact,” Farrell added.