NextEra Energy Inc. and Dominion Energy Inc. entered into a definitive agreement to combine in an all-stock transaction. The companies said the deal would create the world’s largest regulated electric utility business.
Dominion Energy shareholders will receive 0.8138 NextEra Energy shares for each Dominion Energy share at closing. NextEra Energy shareholders would own about 74.5% of the combined company. Dominion Energy shareholders would own about 25.5%.
The combined company will operate under the NextEra Energy name. It will trade on the New York Stock Exchange under the ticker symbol NEE. The company will keep dual headquarters in Juno Beach, Florida, and Richmond, Virginia. Dominion Energy South Carolina will keep its operational headquarters in Cayce, South Carolina.
The company will serve about 10 million utility customer accounts. Those accounts span Florida, Virginia, North Carolina and South Carolina. The combined company will own 110 gigawatts of generation across a broad mix of energy sources. The companies said more than 80% of the business will come from regulated operations.
NextEra Energy and Dominion Energy said the merger will support long-term affordability. They pointed to greater scale, operating efficiencies and capital efficiencies. The combined company also plans $2.25 billion in bill credits for Dominion Energy customers. The credits would go to customers in Virginia, North Carolina and South Carolina over two years after closing.
Dominion Energy’s utility companies will continue to operate under their current names. Those businesses include Dominion Energy Virginia, Dominion Energy North Carolina and Dominion Energy South Carolina.
John Ketchum will serve as chairman and CEO of the combined company. Robert Blue will serve as president and CEO of regulated utilities. Blue also will join the board of directors.
Edward Baine will serve as president and CEO of Dominion Energy Virginia. Keller Kissam will serve as president and CEO of Dominion Energy South Carolina. Scott Bores will serve as president and CEO of Florida Power & Light Co.
Ketchum said rising power demand makes scale more important. He said customers need affordable and reliable power now. Blue said the merger focuses on customers and the communities the companies serve.
The companies said the merger will bring together four regulated utility platforms. They said the platforms have limited operational overlap. The combined company also will have a larger supply chain and expanded development capabilities. It also will have more than 130 gigawatts of large-load opportunities in its pipeline.
The combined company expects a rate base of $138 billion. The companies expect that base to grow through 2032. They said the platform would rank among the top U.S. energy companies in generation, annual capital expenditures, rate base and market capitalization.
NextEra Energy and Dominion Energy also outlined commitments to customers, communities and employees. Those commitments include enhanced charitable giving and continued low-income customer assistance. They also include employment commitments for Dominion Energy’s about 15,000 current employees. The companies said those commitments include current compensation and benefits.
The boards of directors for both companies unanimously approved the transaction. The companies expect the merger to close in 12 to 18 months. The transaction still needs customary closing conditions and approvals.
Required approvals include shareholders of both companies. The companies also need antitrust clearance under the Hart-Scott-Rodino Antitrust Improvements Act. They need approval from the Federal Energy Regulatory Commission under Section 203 of the Federal Power Act. They also need approval from the Nuclear Regulatory Commission. The companies will seek review and approval from utility regulators in Virginia, North Carolina and South Carolina.
Dominion Energy shareholders will continue to receive the company’s current quarterly dividend through closing. They also will receive a one-time cash payment of $360 million at closing. After the transaction closes, Dominion Energy shareholders will participate in NextEra Energy’s pro forma dividend growth policy.