NextEra Energy is acquiring Dominion Energy in an all-stock deal worth about $67 billion, creating a power giant as artificial intelligence drives demand for energy in the United States.
This is the largest proposed merger so far this year and would create the world’s largest regulated power company by market capitalization, the companies announced on Monday.
The combined company will serve approximately 10 million utility customer accounts in Florida, Virginia, North Carolina and South Carolina.
Dominion Energy linemen sit up and work on power lines in the aftermath of Hurricane Helen on Sunday, September 29, 2024 in North Augusta, South Carolina.
AP Photo/Artie Walker Jr., File
Dominion is based in Richmond, Virginia and helps power hundreds of data centers across the state. It also provides regulated electric service to 3.6 million homes and businesses in Virginia, North Carolina and South Carolina, and regulated natural gas service to 500,000 customers in South Carolina.
Juno Beach, Fla.-based NextEra owns Florida Power & Light Company provides power to approximately 12 million people in the state. In December, NextEra and Google Cloud announced an expansion of their existing partnership to build new data center campuses across the United States.
The potential partnership between the two companies comes amid a pushback against AI data centers from consumers concerned about rising electricity bills. Some governors and attorneys general who are protesting rising electricity rates say cash-strapped residents are trapped in a dysfunctional system.
Officials and lawmakers in at least six states, including Arizona, Indiana, Maryland, New Jersey, New York and Pennsylvania, are taking new steps to block proposed rate hikes by power companies. Some utilities are pushing to completely change their financing models for major system upgrades.
Dominion shareholders will receive a fixed exchange ratio of 0.8138 shares of NextEra Energy for each Dominion share they own. Dominion shareholders will continue to receive Dominion’s current quarterly dividends until closing, as well as a lump sum payment of $360 million at closing.
NextEra shareholders will own 74.5% of the combined business, and Dominion shareholders will own 25.5%.
NextEra CEO John Ketchum will become chairman and CEO of the combined company.
“We are combining NextEra Energy and Dominion Energy because scale matters now more than ever. Not because of scale, but because scale leads to capital and operational efficiencies, which allow us to buy, build, finance and operate more efficiently, making power more affordable to our customers in the long run,” Ketchum said in a statement.
The combined company will be headquartered in Juno Beach, Florida and Richmond, Virginia. The company will also maintain Dominion Energy South Carolina’s existing operating headquarters in Cayce, South Carolina.
The business will use the NextEra name and will trade on the New York Stock Exchange under the ticker symbol “NEE.” The board of directors includes 10 members from NextEra and four members from Dominion.
The transaction has been approved by both companies’ boards of directors and is expected to close within 12 to 18 months. It still requires approval from NextEra and Dominion shareholders and various regulatory approvals, including approval from the Nuclear Regulatory Commission.
Dominion stock rose another 9.61% in morning trading, while NextEra stock fell 5%.
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