Duke Energy Corp. (DUK) and Progress Energy Inc. would be “well-positioned” to make additional acquisitions after Duke’s $16 billion takeover is completed, the company’s executives said.
“We would be as well positioned as almost anybody to do more” transactions, Bill D. Johnson, chairman and chief executive officer of Progress Energy, said in an interview today at an Edison Electric Institute meeting in Orlando, Florida.
The companies, which would form the largest U.S. utility owner, would consider a deal if there was a “compelling reason” for a purchase that would be “value-creative,” said Johnson, who will become CEO of the combined entity.
High capital costs for building and replacing power plants and upgrades required for an aging electricity grid will drive more consolidation in the U.S. utility industry during the next decade, Jim Rogers, chairman and CEO of Charlotte, North Carolina-based Duke Energy, said in the interview.
Companies with bigger balance sheets will be able to use their size and scale to make investments while mitigating some of the price increases for customers, said Rogers, who will become executive chairman when the acquisition is done.
The takeover of Raleigh, North Carolina-based Progress Energy will be completed by the end of the year or early next year after gaining federal and state approvals, Rogers said.
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