Southern Company, AGL Resources in USD 12 bln merger

Southern Company and AGL Resources, the parent company of Pivotal LNG, revealed that they have approved a definitive merger agreement to create an electric and gas utility company.

Pursuant to the agreement, AGL will become a new wholly owned subsidiary of Southern in a transaction with an enterprise value of approximately $12 billion, including a total equity value of approximately $8 billion, companies said in a statement.

Under the terms of the agreement, AGL’s shareholders will be entitled to receive $66 in cash for each share of the company’s common stock.

When completed, the combination will better position the companies to provide necessary natural gas infrastructure to meet customers’ growing energy needs, and will create the second-largest utility company in the U.S. by customer base with 11 regulated electric and natural gas distribution companies providing service to approximately nine million customers with a projected regulated rate base of approximately $50 billion.

The joint company will operate nearly 200,000 miles of electric transmission and distribution lines and more than 80,000 miles of gas pipelines and have a generating capacity of approximately 46,000 megawatts.

After closing, AGL will continue to maintain its own management team and board of directors.

Southern has committed financing from Citigroup Global Markets and plans to put long-term financing in place prior to the closing of the transaction.

Image: AGL Resources