The deal between SCANA Corporation and Dominion Energy Inc will have the latter acquiring the former. This will be done through a stock-for-stock merger that will have holders of SCG stock receiving 0.6690 shares of D stock for each share they own.
The stock-for-stock exchange has Dominion Energy Inc valuing SCG stock at $55.35 per share based on its volume-weighted average stock price of the last 30 days of trading. This also represents a total value of $7.9 billion for SCANA Corporation. When including net debt, the value of the deal increases to $14.6 billion.
Dominion Energy Inc says that it expects the acquisition of SCANA Corporation to be immediately accretive to its earnings. It is also expecting the deal to increase its annual earnings per share target growth to 8% or higher through 2020.
So long as the deal doesn’t run into trouble with regulators or shareholders, the two companies will complete it in 2018. This will have SCANA Corporation becoming a wholly owned subsidiary of Dominion Energy Inc.
SCANA Corporation will continue to operate out of its current headquarters in South Carolina after the deal closes. Dominion Energy Inc will also be providing it with $1 million a year for five years to put toward charitable contributions in its communities. Its employees will also have job protection until 2020.
SCG stock was up 23% and D stock was down 3% as of Wednesday morning.
As of this writing, William White did not hold a position in any of the aforementioned securities.