Progress Energy And Duke Energy To Merge, Says Goldman Sachs

Goldman Sachs has published a research report on Progress Energy, Inc. (NYSE: PGN) after the company announced a merger with Duke Energy (NYSE: DUK).

In the report, Goldman Sachs writes "Duke Energy (DUK, Sell) and Progress Energy (PGN, Neutral) today announced a merger, where PGN shareholders would receive 2.6125 shares of DUK in a transaction, representing a total equity value of $37bn and an enterprise value of $65bn, per today's announcement. The combination reflects a premium of 4% on the closing share price for PGN as of January 8. Prior to the transaction's closing, DUK would effect a reverse stock split, with the exchange ratios adjusted accordingly. The companies will seek regulatory approvals in the coming months from the Department of Justice, the FERC, the SEC and state utility regulators in Florida, the Carolinas, Indiana, Kentucky and Ohio. After closing, DUK shareholders would hold approximately 63% of the combined company and PGN holders would own 37%."

Progress Energy closed Friday at $44.37 while Duke Energy closed at $17.79.