Two major players in the Carolina energy business could soon merge. The deal would allow Duke Energy to extend it's reach in the natural gas industry.
The company announced Monday that it plans to buy Piedmont Natural Gas for about $6.7 billion in cash and debt.
“Piedmont Natural Gas would merge into a special subsidiary of Duke Energy,” says Thomas Molony, a professor at Elon University School of Law. “Once the merger is consummated, each shareholder and each share of stock would be exchanged for $60 in cash.”
Molony says the merger will extend the footprint for both companies.
Duke Energy has customers located in six states in the Southeast and Midwest, and Piedmont Natural Gas has around one million customers.
They're already key partners in the $5 billion Atlantic Coast Pipeline.
John Neufeld, an economics professor with the University of North Carolina at Greensboro, says the merger could mean less choice, and potentially higher prices for consumers.
“Combined they have the possibility of making a higher profit than some of their separate profits were individually,” says Neufeld. “If that's the case, then that higher profit might well come primarily out of consumers through higher prices.”
The deal requires the approval of state and federal regulators, along with Piedmont shareholders.
The merger is expected to close by the end of next year.
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