NextEra Energy Made Takeover Approach to Duke Energy -- Update
September 29 2020 - 8:07PM
Dow Jones News
By Cara Lombardo, Maureen Farrell and Dana Cimilluca
NextEra Energy Inc. recently made a takeover approach to Duke
Energy Corp., according to people familiar with the matter, testing
the waters for what would be a $60 billion-plus combination of two
southern utilities.
Duke rebuffed the approach but NextEra is still interested in
pursuing a deal, some of the people said. There is no guarantee
NextEra will do so and if it does, that a deal would result.
Should there be one, it would be big. Duke, based in Charlotte,
N.C., has a market value of roughly $61 billion following a 14%
decline in its share price this year, and an acquisition of the
company could be the largest utility deal ever and the biggest
merger so far this year.
With a market value of about $139 billion after its stock rose
22% so far this year, Juno Beach, Fla.-based NextEra is the largest
public utility company in the U.S.
It owns Florida Power & Light Co., which has more than 5
million customers in Florida and is the biggest rate-regulated
electric utility in the U.S. by retail electricity produced,
according to the company's website. It also owns Gulf Power Co.,
which serves more than 470,000 customers in eight counties in
northwest Florida.
Utility investors see Florida as a particularly desirable market
given the constant need for air conditioning and growing
population.
NextEra also owns a clean-energy business that, along with
affiliates, is the world's largest generator of renewable wind and
solar energy. It also operates emissions-free electricity from
plants in Florida, New Hampshire, Iowa and Wisconsin.
Duke provides electricity to roughly 7.7 million retail
customers in six states, including the Carolinas, some Midwestern
states and Florida, according to its website, and distributes
natural gas to more than 1.6 million customers in Ohio, Kentucky,
Tennessee and the Carolinas. It has a commercial business with
power-generation assets in North America including a renewables
portfolio.
NextEra has been an active acquirer of smaller assets in recent
years and has also eyed larger deals, benefiting from its bulk and
a stock price that has outperformed those of its peers. It
announced a deal Tuesday to buy an independent transmission company
for $660 million, including debt.
The biggest deal announced so far this year is Nvidia Corp.'s
$40 billion acquisition of SoftBank Group Corp.-owned chip designer
Arm Ltd. Merger and acquisition volumes are down 22% globally and
43% in the U.S. compared with last year, in large part because
executives shifted focus from deal-making to respond to the impact
of the coronavirus pandemic. Recently, however, the M&A market
has begun to show signs of life as companies begin to regain their
footing and look to establish strategic plans for the post-pandemic
era.
Write to Cara Lombardo at cara.lombardo@wsj.com, Maureen Farrell
at maureen.farrell@wsj.com and Dana Cimilluca at
dana.cimilluca@wsj.com
(END) Dow Jones Newswires
September 29, 2020 19:52 ET (23:52 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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