For $4.3 billion in stock, Northeast Utilities is acquiring Massachusetts-based NStar, with the combined giant to maintain dual headquarters in Hartford and Boston.
While billed as a merger of equals, Northeast Utilities shareholders will own 56 percent of the combined company”™s shares, which will drop the NStar name and do business as Northeast Utilities. NStar CEO Thomas May will run the new Northeast Utilities, while Charles Shivery will be chairman for 18 months before relinquishing the role to May. Each company will nominate seven trustees, with Northeast Utilities assigning a lead trustee for the board.
The combined company will operate six regulated electric and gas utilities in three states and will have nearly 3.5 million electric and gas customers. The new Northeast Utilities will have nearly 4,500 miles of electric transmission lines, 72,000 miles of electric distribution lines and 6,000 miles of gas distribution lines.
Northeast Utilities owns Connecticut Light & Power, the dominant utility in Fairfield County.
“The combination of Northeast Utilities and NStar will create a great New England-based company, assuring the regional benefits of a locally controlled energy company for years to come,” said Shivery, CEO of Northeast Utilities, in a prepared statement. “Our companies already have a strong track record of working together for New England. We recently jointly executed an agreement to invest $1.1 billion in new transmission lines to Québec, which will provide low-carbon hydro energy to power one million homes in New England beginning in 2015.”
