Northeast Utilities and NSTAR have agreed to merge in a deal that will form New England's premier utility company, worth $17.5 billion.
The companies have described the deal as a merger of equals, but if it goes through it will retain the Northeast Utilities name. NU shareholders would own approximately 56 percent and NSTAR shareholders would own approximately 44 percent of the combined company.
NU, headquartered in Hartford, operates New England’s largest utility system with annual revenues of approximately $5.4 billion and assets of $14.2 billion. NSTAR, headquartered in Boston, is an energy delivery company with annual revenues of approximately $3 billion and assets of $8 billion that serves 1.4 million customers in Massachusetts.
The combined company will operate six regulated electric and gas utilities in Massachusetts, New Hampshire and Connecticut with nearly 3.5 million electric and gas customers.
“The combination of Northeast Utilities and NSTAR will create a great New England based company, assuring the regional benefits of a locally controlled energy company for years to come,” said Charles W. Shivery, chairman, president and CEO of Northeast Utilities.
“Our companies already have a strong track record of working together for New England. We recently jointly executed an agreement to invest $1.1 billion in new transmission lines to Québec, which will provide low-carbon hydro energy to power one million homes in New England beginning in 2015.”
Thomas J. May, chairman, president and CEO of NSTAR said, “This is simply the start. Together, with enhanced financial resources, complementary distribution and transmission assets, reputations for operating excellence and talented employees, we will be able to accomplish great things. NSTAR’s very strong balance sheet coupled with Northeast Utilities’ impressive array of transmission investment opportunities and diversified suite of distribution businesses translates into a compelling growth story.”
Upon the closing of the transaction, Charles W. Shivery will become the non-executive chairman of Northeast Utilities for a period of 18 months. Thomas J. May will serve as president and CEO and assume the additional role of chairman after 18 months.
The companies anticipate that the regulatory approvals can be obtained within 9 – 12 months. They intend to seek shareholder approval of the transaction in early 2011.
