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Evergy (EVRG) Evolves From Great Plains-Westar Energy Merger

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The successful stock-for-stock merger between Westar Energy Inc and Great Plains Energy Incorporated has formed Evergy Inc. (EVRG - Free Report) , with equity value of $15 billion. The new entity commenced trade in the exchange from Jun 5, 2018, and became a member of the elite S&P 500 group on the same day by replacing Navient Corporation (NAVI - Free Report) .

Evergy will serve more than 1.6 million utility customers in Kansas and Missouri. Nearly 50% of the electricity supplied to its customers will come from clean sources. The company will operate through its subsidiaries — Westar Energy and Kansas City Power and Light Company.

Benefits of Merger to Customers

Customers of Westar Energy and Great Plains Energy will enjoy the benefits of customer bill credits over the first five years, post the closure of the merger. Customers in Missouri will receive $29-million bill credit and in Kansas, they will get bill credit worth $75 million.

Benefits for Shareholders

Evergy is planning a 60-million share repurchase of its common stock for the next two years, which is likely to stabilize the capital structure. Shareholders will benefit from solid returns and attractive dividend growth.

Focus on Renewables

The new utility will focus on renewable energy sources to meet household and businesses requirements. The company, which will be among the largest wind power operators in the United States, plans to add more renewable sources in its generation fleet in the long run.

Zacks Rank

Evergy carries a Zacks Rank #3(Hold). You can see the complete list of today’s Zacks  #1 Rank (Strong Buy) stocks here.

Acquisition & Merger in Utility Space

In a bid to increase scope of operation and utilize resources, Utility players are resorting to mergers and acquisitions. Larger companies are frequently resorting to this trend, courtesy of funds that are essential for vital infrastructure upgrades.

In early 2018, SCANA Corporation entered into a merger agreement with Dominion Energy (D - Free Report) . Per the deal, stockholders of SCANA will get 0.669 shares of Dominion. Considering the assumption of $6.7-billion debt of SCANA by Dominion, the transaction is worth about $14.6 billion.

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Dominion Energy Inc. (D) - free report >>

Navient Corporation (NAVI) - free report >>

Evergy Inc. (EVRG) - free report >>

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