AltaGas, WGL Said to Hold Talks on Merger Topping $5 BillionBy and
WGL was said to be weighing a sale after Iberdrola interest
Companies supply natural gas to customers in North America
The companies are continuing to talk about a potential deal, and negotiations may still fall apart, the person said, asking not to be identified because the matter is private. WGL was said to be weighing a sale in November after getting takeover interest from Spain’s Iberdrola SA.
Bernie Tylor, a spokesman for WGL, said by e-mail that the company wouldn’t comment on "market rumors." AltaGas said it’s in talks regarding a potential transaction with a third party, which it didn’t identify, and that no agreement has been reached. WGL jumped as much as 11 percent on Thursday. Trading was suspended on AltaGas after the stock surged as much as 2.1 percent and then slid.
The potential takeover comes as natural gas providers increasingly become prime takeover targets with demand for the heating fuel growing and regulated utilities promising dependable returns. The utility sector has also been caught up in wave of consolidation as electricity sales weaken, with Dominion Resources Inc., Duke Energy Corp. and Southern Co. all recently announcing takeovers of gas utilities.
Washington-based WGL owns Washington Gas, a utility that supplies gas service to more than one million customers in the District of Columbia, Maryland and Virginia, the company’s website shows. It also runs unregulated units that provide energy services to residential and commercial customers.
AltaGas runs power plants capable of generating more than 1,600 megawatts and serves more than 560,000 gas customers in North America, its website shows.