A few words about Dominion Energy’s acquisition of First Energy
By Michael DeBrant / Staff reporterThe New York Stock Exchange is trading at a record high after the Federal Energy Regulatory Commission (FERC) granted Dominion Energy its largest acquisition approval of the year, and the stock has continued to rally as investors await the confirmation of the deal.
Shares of Dominion Energy jumped more than 11 percent Thursday afternoon, closing up nearly 4 percent.
The stock closed at $43.85 at the close of trading, up more than 3 percent since Thursday.
The deal is expected to result in a 25 percent to 35 percent increase in Dominion’s total shareholder value, according to the FERC.
Dominion has said it expects the deal to generate $4 billion in net income for the company, according the SEC filings.
Dominion, which also owns and operates the Dakota Access Pipeline, plans to pay First Energy $4.2 billion to purchase the company’s remaining assets and invest them in its core business of natural gas transmission.
The deal would be Dominion’s biggest acquisition ever.
The FERC granted the FEPF approval on Friday for Dominion’s $13.2 million acquisition of the First Energy group, which includes oil, natural gas and renewable energy businesses.
Dominion, which is one of the nation’s largest natural gas producers, has long been rumored to be interested in buying the FECV company.
The acquisition is expected create up to 2,200 jobs and is expected be completed by the end of the decade, according Dominion.
Dominance’s announcement Thursday evening came a day after First Energy stock rose nearly 4% to $43 a share after the company said it had received a $2.3 billion loan from the FED to expand its operations in the U.S. and abroad.
Dominion said it is confident that it will repay the loan and is in discussions with banks to finance the acquisition.
Dominant also said in a news release Thursday that it is evaluating potential acquisitions of its renewable energy business.
The company said the $3 billion project would “enable it to grow its energy portfolio in the US and Europe.”
First Energy, which was formed in 2009 and is the nations largest wind energy utility, was founded by David W. Eisler, an investor who was convicted in 2003 of insider trading.
In 2008, Dominion acquired the natural gas division of the company for $3.8 billion, and in 2012, Dominion sold its remaining assets to private equity firm Blackstone.