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SCANA & Dominion Energy's Merger Deal Gets FERC Approval

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SCANA Corporation’s proposed merger with Dominion Energy, Inc. (D - Free Report) recently received an important approval from the Federal Energy Regulatory Commission (FERC), which declared the deal to be consistent with public interest.

Notably, in January, SCANA entered into an agreement with its larger peer Dominion Energy. Per the accord, stockholders of SCANA would receive 0.669 shares of Dominion Energy for each share they hold. The transaction is worth roughly $14.6 billion, including the assumption of debt load worth $6.9 billion by Dominion Energy.

About the Merger

The nod from FERC marks an important step for the all-stock merger deal, which is expected to close by the end of 2018. Earlier in March, the deal received an approval from the Georgia Public Service Commission. In February, the electric utility players received consent from the Federal Trade Commission (“FTC”).

Meanwhile, the deal is yet to receive a green signal from the public service commissions of North and South Carolina. Also, the Nuclear Regulatory Commission and shareholders of SCANA are required to authorize the merger.

Following the completion of the deal, the merged entity is expected to have a wide customer base of around 6.5 million. The combined company is anticipated to generate 31,400 megawatts of electricity. Moreover, their combined power distribution lines will likely spread across 93,600 miles. Additionally, the entity will have a network of 106,400 miles of natural gas pipelines, along with 1 trillion cubic feet natural gas storage system.

Price Performance

SCANA has lost 47.2% of its value in the past two years compared with the industry’s 4.3% fall.

 

Zacks Rank and Stocks to Consider

SCANA currently has a Zacks Rank #3 (Hold). Investors interested in the Utility sector can opt for some better-ranked stocks like Algonquin Power & Utilities Corp. (AQN - Free Report) and Atlantica Yield plc (AY - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Oakville, Canada-based Algonquin Power & Utilities is a renewable energy and regulated utility company. The company’s top line for 2018 is anticipated to improve 4.8% year over year, while its bottom line is expected to increase 13.8%.

Brentford, the United Kingdom-based Atlantica Yield is a utility energy company. The company’s top line for 2018 is anticipated to improve 10.3% year over year, while its bottom line is expected to increase more than 580%.

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