AKRON, Ohio, Feb. 11 (UPI) — Energy supplier FirstEnergy of Ohio said Thursday it agreed to buy Allegheny Energy for $4.7 billion, creating an electric company with 6 million customers.
FirstEnergy said it would not change its name as it expands its distribution network to seven states and absorbs Allegheny’s 1.5 million customers.
The deal set the value of Allegheny stock at $27.65 per share, the companies said in a joint statement.
The merger would increase FirstEnergy’s annual revenue to about $16 billion through 10 distribution companies serving Maryland, Pennsylvania, Ohio, New Jersey, New York, Virginia and West Virginia.
Combined, the company would control a network of 20,000 miles of high-voltage transmission lines, the statement said.
FirstEnergy President and Chief Executive Officer Anthony Alexander said the deal would “increase generation resources by 70 percent, more than double the amount of super critical coal capacity,” and create better economies of scale for the company.
The firm expects to realize pretax synergies of $180 million in the first year and $350 million in the second year.
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