In an all-stock deal worth roughly $67 billion, NextEra Energy is looking to acquire Dominion Energy to create a huge power firm as artificial intelligence drives up demand in the United States.
It is one of the largest mergers that have been proposed so far this year, and the firms said on Monday that it will result in the largest regulated electric utility company in the world by market value.
About 10 million utility customer accounts in Florida, Virginia, North Carolina, and South Carolina will be served by the combined business.
Dominion, a Richmond, Virginia-based company, provides power to hundreds of data centers throughout the state.
Additionally, it offers regulated natural gas service to 500,000 consumers in South Carolina and regulated electrical service to 3.6 million homes and companies in Virginia, North Carolina, and South Carolina.
Florida Power & Light Company, which supplies power to around 12 million people throughout the state, is owned by NextEra, a company based in Juno Beach, Florida.
NextEra and Google Cloud announced in December that they were extending their current collaboration to construct other data center campuses throughout the United States.
The two businesses’ possible partnership coincides with a backlash against AI data centers from consumers who are concerned about rising electricity costs.
Cash-strapped citizens are locked in a flawed system, according to some governors, attorneys general, and others fighting soaring electricity rates.
At least six states, including Arizona, Indiana, Maryland, New Jersey, New York, and Pennsylvania, have lawmakers and officials resorting to extreme measures to try to thwart utility bill rises.
Some are putting pressure on utilities to fund significant system upgrades in an entirely different way.
For every share of Dominion that a shareholder owns, they will receive a fixed exchange ratio of 0.8138 shares of NextEra Energy.
In addition to a $360 million one-time cash payment upon closure, Dominion stockholders will continue to receive the company’s regular quarterly dividend.
Dominion’s shareholders will possess 25.5% of the combined company, while NextEra’s shareholders would own 74.5%.
John Ketchum, the CEO of NextEra, will be the combined company’s chairman and CEO.
“We are joining forces with Dominion Energy and NextEra Energy because scale is more important than ever—not for the sake of it, but because scale translates into operating and capital efficiencies.
It makes it possible for us to purchase, construct, finance, and run our business more effectively, which eventually results in more reasonably priced electricity for our clients,” Ketchum said in a statement.
The united business will be headquartered in both Richmond, Virginia, and Juno Beach, Florida.
Additionally, Dominion Energy South Carolina’s current operations headquarters in Cayce, South Carolina, will remain in place.
The company will trade on the New York Stock Exchange under the “NEE” ticker symbol and employ NextEra’s name. Ten NextEra directors and four Dominion directors will make up its board of directors.
The boards of both corporations authorized the agreement, which is expected to close in 12 to 18 months.
In addition to several governmental approvals, including approval from the Nuclear Regulatory Commission, it still needs approval from NextEra and Dominion shareholders.
Dominion’s stock increased by 9.61% during morning trade, while NextEra’s shares decreased by 5%.
