Vectren, Texas Company Detail Merger Plans
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowA Texas-based energy company with operations in six states has announced a $6 billion merger with Evansville-based Vectren Corp. (NYSE: VVC). Under terms approved by both CenterPoint Energy Inc.’s (NYSE: CNP) and Vectren’s boards of directors, Vectren shareholders will receive $72 per share and CenterPoint will assume the Hoosier company’s debt. Vectren Chief Executive Officer Carl Chapman says the combined company’s natural gas utility operations will be headquartered in Evansville.
"With CenterPoint Energy, we’ve found the right partner to begin the next chapter for Vectren and our family of companies. They share the same core values and dedication to the communities they serve, which is evidenced by the commitments they have made to our employees, philanthropic outreach, and Evansville, Ind., our home," Chapman added. "Together, we will be a stronger, more competitive company that will be well-positioned to continue to provide value for our stakeholders in the years to come." CenterPoint says it will continue to operate Vectren’s Indianapolis-based non-utility infrastructure services business and its Newburgh-based energy services contracting business.
In addition to the natural gas delivery business, CenterPoint says the combined company’s lead executives will be headquartered in Evansville. A chief business officer for Vectren’s electric business will be established to handle electric grid modernization and generation transition initiatives recently launched in southwest Indiana. CenterPoint says utility field employees will be retained, as will key utility operational support activities in Evansville. Additionally, CenterPoint says $3 million more per year will be donated to the Vectren Foundation for at least five years after the merger closes.
CenterPoint currently employs close to 8,000 and has more than 100,000 natural gas customers in 33 states. Vectren’s footprint includes 5,500 employees and over 1 million natural gas customers in Indiana and Ohio. CenterPoint says the combined company’s electric and natural gas delivery operations will be located in eight states and its total assets will be valued at $27 billion.
CenterPoint CEO Scott Prochazka, who will serve as president and CEO of the combined company once the transaction closes, says "this merger represents a significant step toward our vision to lead the nation in delivering energy, service and value. By combining our two highly complementary companies, we are creating an energy delivery, infrastructure and services leader that will drive value for our shareholders and customers, while enhancing growth opportunities for our businesses."
The deal is expected to close in the first quarter of next year and still needs Federal Energy Regulatory Commission and Federal Communications Commission approvals.
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