NextEra Energy to acquire Dominion Energy

An energy company headquartered in Florida is buying Dominion Energy.

NextEra Energy Inc. and Dominion Energy Inc. announced May 19 that they have entered into a definitive agreement to combine their organizations in an all-stock transaction.

Dominion Energy has more than 1.3 million electric and natural gas customers in South Carolina across the Midlands and Lowcountry, and serves 3.6 million electric customers in Virginia and the Carolinas.

Dominion Energy shareholders will receive a fixed exchange ratio of 0.8138 shares of NextEra Energy for each share of Dominion Energy they own at the close of the transaction, resulting in NextEra Energy and Dominion Energy shareholders owning approximately 74.5% and 25.5% of the combined company, respectively, according to a joint news release from NextEra and Dominion.

The combination will create the world’s largest regulated electric utility business, the news release stated. The combined company will be more than 80% regulated, serve approximately 10 million utility customer accounts across Florida, Virginia, North Carolina and South Carolina and own 110 gigawatts of generation across a broad mix of energy sources.

Dominion Energy operates the Virgil C. Sumner Nuclear Power Station in Fairfield County.

Monday’s announcement says the combined company will drive affordability in the long term by leveraging scale and operating and capital efficiencies as the company makes investments on behalf of its customers to meet growing power demand. Additionally, the combined company is proposing $2.25 billion in bill credits for Dominion Energy’s customers in Virginia, North Carolina and South Carolina spread over two years post-close.

The transaction is structured as a 100% stock-for-stock transaction and is expected to be tax-free to shareholders, according to the release. The combined company will operate under the NextEra Energy name and trade on the New York Stock Exchange under the ticker symbol NEE. It will have dual headquarters in Juno Beach, Fla., and Richmond, Va., along with Dominion Energy South Carolina’s existing operational headquarters in Cayce. Dominion Energy’s utility companies will continue to operate as Dominion Energy Virginia, Dominion Energy North Carolina and Dominion Energy South Carolina, the release said.

John Ketchum will serve as chairman and CEO of the combined company, and Robert Blue will serve as president and CEO of regulated utilities and as a member of the board of directors. Edward Baine will be president and CEO of Dominion Energy Virginia, Keller Kissam will be president and CEO of Dominion Energy South Carolina and Scott Bores will be president and CEO of Florida Power & Light Company.

“This is a historic moment for our two companies and for the states we are privileged to serve. Electricity demand is rising faster than it has in decades,” Ketchum said in the release. “Projects are getting larger and more complex. Customers need affordable and reliable power now, not years from now. We are bringing NextEra Energy and Dominion Energy together because scale matters more than ever — not for the sake of size, but because scale translates into capital and operating efficiencies. It enables us to buy, build, finance and operate more efficiently, which translates into more affordable electricity for our customers in the long run.”

The Dominion Energy name is not changing, he said.

“By uniting two industry leaders with 238 years of collective experience, this combination creates a stronger company for customers and a stronger long-term value proposition for shareholders,” Ketchum said in the release.” Customers will benefit from $2.25 billion in bill credits and over time from the scale, operating and capital efficiencies this combination unlocks.”

The company will have approximately 10 million utility customer accounts across four high-growth states, the release stated.

“Dominion Energy and NextEra Energy share a deep commitment to delivering reliable and affordable energy and to the customers and communities we are honored to serve,” Robert Blue, chair, president and CEO of Dominion Energy, said in the release. “This combination brings together two strong operating platforms and creates an even stronger energy partner for Virginia, North Carolina, South Carolina and Florida, with the scale and balance sheet to deliver the generation, transmission and grid investments our customers and economies need.”