Dominion Energy Agrees to Merge into NextEra Energy

NextEra Energy Inc has signed an agreement to take over Dominion Energy Inc in an all-stock merger that the companies said would create the world's biggest regulated power utility by capitalization.

Shareholders of Richmond, Virginia-based Dominion are to receive 0.8138 shares of Juno Beach, Florida-headquartered NextEra Energy for each share they own at Dominion at the close of the transaction. NextEra shareholders would own about 74.5 percent of the combined company while Dominion shareholders would hold 25.5 percent.

"Dominion Energy shareholders will continue to receive Dominion's current quarterly dividend through closing plus a one-time cash payment of $360 million (which is taxable and is distributed equally across all outstanding Dominion Energy shares) at closing", the New York-listed companies said in a joint statement.

"Thereafter, Dominion Energy will participate in NextEra Energy's pro forma dividend growth policy.

"NextEra Energy shareholders will continue to own the same number of shares of the combined company that they hold of NextEra Energy immediately prior to the closing of the transaction".

The resulting entity would trade under the existing NextEra name and ticker on the New York Stock Exchange.

Dominion's utilities will continue to operate as Dominion Energy Virginia, Dominion Energy North Carolina and Dominion Energy South Carolina.

NextEra chair, president and chief executive John Ketchum would remain chair and CEO at the enlarged NextEra. Dominion president and CEO Robert Blue would retain those titles for regulated entities under the new company. The new board would have 10 directors from NextEra and 4 from Dominion.

"The combined company will be more than 80 percent regulated, serve approximately 10 million utility customer accounts across Florida, Virginia, North Carolina and South Carolina and own 110 gigawatts (GW) of generation across a broad mix of energy sources", the parties said.

"With growth drivers evenly balanced between regulated and long-term contracted businesses and more than 130 GW of large-load opportunities in its pipeline, the combined company will have a broader opportunity set, more ways to grow and the scale, balance sheet and best-in-class operating, supply chain, construction and technology capabilities to deliver the generation, transmission and grid investments needed to serve customers, support economic growth and cost-effectively meet surging power demand while keeping bills affordable", the statement added.

The parties expect to grow their combined rate base of $138 billion by 11 percent through 2032.

The companies are proposing $2.25 billion in bill credits from the combined entity for Dominion's customers in Virginia, North Carolina and South Carolina, to be distributed over two years.

Ketchum said, "Electricity demand is rising faster than it has in decades. Projects are getting larger and more complex. Customers need affordable and reliable power now, not years from now".

"We are bringing NextEra Energy and Dominion Energy together because scale matters more than ever - not for the sake of size, but because scale translates into capital and operating efficiencies".

"The Dominion Energy name isn't changing, nor is how we operate locally, serve our customers or engage with the community", Ketchum noted. "The same leaders and the same teams customers know and trust will continue serving Virginia, North Carolina and South Carolina".

The parties expect to consummate the transaction in 12-18 months, subject to approval by the shareholders of both companies, federal anti-trust clearance, state regulatory approvals and other conditions.

As of the end of the first quarter, NextEra had an equity of $66.63 billion and liabilities of $154.79 billion while Dominion had an equity of $33.71 billion and liabilities of $84.87 billion, according to the companies' quarterly reports.

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