Duke Energy to Buy Piedmont Natural Gas for $4.9 Billion

Duke Energy Corp. said Monday that it had struck a deal to acquire Piedmont Natural Gas Co. in a deal worth about $4.9 billion, adding roughly 1 million natural-gas customers to its base.

Under the terms of the pact, Piedmont shareholders will receive $60 a share, which represents a 40% premium from the stock's closing price on Oct. 23.

In addition, Duke Energy will also assume approximately $1.8 billion in Piedmont debt. Duke said it would finance the deal with a combination of debt, between $500 million and $750 million of newly issued paper, and other cash sources.

Piedmont's stock has pushed to all-time highs recently and is up 17% in the past three months. Duke shares during that time rose 2.9%.

"We look forward to welcoming Piedmont's employees and 1 million customers in the Carolinas and Tennessee to Duke Energy," said Lynn Good, CEO of Duke Energy.

The deal is pending regulatory and Piedmont shareholders' approval and the companies aim to close the transaction by the end of next year.

Duke and Piedmont are already partners on the Atlantic Coast Pipeline, a $5 billion natural-gas pipeline that the companies say would be the first "major" one to serve eastern North Carolina.

When the deal is completed, Piedmont will operate as a business unit of Duke Energy and keep its name and headquarters in southeast Charlotte. Duke Energy will Piedmont board member to its board, and a Piedmont executive will run Duke's natural gas operations in the Carolinas, Tennessee, Ohio and Kentucky.

Last week, the Charlotte, N.C.,-based Duke reached an $81 million settlement agreement to end a class-action lawsuit alleging it gave improper rebates to some large electric customers of its Ohio subsidiary.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

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(END) Dow Jones Newswires

October 26, 2015 08:05 ET (12:05 GMT)

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