Leading energy utility firm Southern Company (SO - Free Report) and Atlanta, GA-based energy services holding company, AGL Resources Inc. jointly announced the completion of their $12 billion merger. This has resulted in the creation of the second-largest U.S. utility in terms of customer base after Exelon Corporation (EXC - Free Report) .
In April, Southern Company’s proposed acquisition of AGL Resources received approval from The Georgia Public Service Commission. Also, the merger received permission from the regulators of New Jersey last week. The deal was finalized after this final regulatory approval.
This merger combines 11 regulated electric and natural gas distributions. The integrated entity will serve about nine million customers and is expected to have an electricity generating capacity of about 44,000 MWs. Also, the companies will operate close to 200,000 miles of electric transmission and distribution lines and would integrate more than 80,000 miles of gas pipelines.
In Aug 2015, Southern Company entered into an agreement to acquire AGL Resources. Per the original terms of the deal, the stockholders of AGL Resources received $66 per share in cash. AGL Resources – like Southern Company’s other subsidiaries – will continue to maintain its own management team, board of directors and corporate headquarters.
Headquartered in Atlanta, GA, Southern Company is one of the largest electric utility holding companies in the U.S.,and serves the booming Southeast market, which is considered to be an advantageous region to operate in, owing to the higher-than-average natural population growth, the strong and diverse regional economy, constructive regulation and comparatively tight power markets.
Currently, Southern Company carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players in the broader energy sector include McDermott International Inc. (MDR - Free Report) and Braskem S.A. , both sporting a Zacks Rank #1 (Strong Buy).
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