By OGJ editors
HOUSTON, May 10 -- Cinergy Corp., Cincinnati, and Duke Energy Corp., Charlotte, NC, have signed a definitive merger agreement to create an energy company with approximately $36 billion in market capitalization and 5.4 million retail customers through a stock swap.
The merger, unanimously approved by both companies' boards of directors, will create a combined energy company with assets totaling more than $70 billion. The combined company will retain the name of Duke Energy Corp. Based on the two companies' financial reports at the end of 2004, it will have annual revenue of $27 billion and annual earnings of $1.9 billion. It will own or operate 54,000 Mw of electric generation capacity in the US and elsewhere, with a diverse fuel mix of nuclear, coal, natural gas, and hydroelectric power.
Duke Energy operates more than 17,500 miles of natural gas transmission pipeline with 250 billion cu ft of gas storage capacity and is, through its joint venture with ConocoPhillips, the largest producer of natural gas liquids in North America, said company officials. The combined company will have operations in two thirds of the US as well as Canada and several other international locations, primarily in Latin America.
Paul M. Anderson, current chairman and chief executive of Duke Energy, will be chairman of the combined company. James E. Rogers, chairman, president, and chief executive of Cinergy, will be president and chief executive of the new firm. The new board will have 10 members named by Duke Energy and 5 named by Cinergy. Headquarters will be in Charlotte.
The merged company will serve 3.7 million retail electric customers and 1.7 million retail gas customers in Ohio, Kentucky, Indiana, North Carolina, South Carolina, and Ontario, Canada, with more than 25,000 Mw of generation. Coupled with the pipeline operations, the regulated businesses will "create the financial strength and scale to participate in the continuing consolidation of the utility sector," said company officials.
Some 1,500 of the current 29,350 employees will be eliminated through attrition, early retirements, and other severance programs, they said. Duke Energy Gas Transmission and certain commercial operations will remain in Houston. Duke Energy Field Services will remain headquartered in Denver, and Crescent Resources will continue to be located in Charlotte.
At the completion of the merger, pending regulatory approval, Fred Fowler, president of Duke Energy, will become president and chief executive officer of the company's gas operations.
