FirstEnergy and Allegheny Energy to Combine in $8.5 Billion Stock-For-Stock Transaction
ON February 11, 2010 — FirstEnergy (NYSE: FE) and Allegheny Energy, Inc. (NYSE: AYE) today announced that both companies' boards of directors have unanimously approved a definitive agreement in which the companies would combine in a stock-for-stock transaction.
Under the terms of the agreement, Allegheny shareholders would receive 0.667 shares of FirstEnergy common stock in exchange for each share of Allegheny they own. Based on the closing stock prices for both companies on February 10, 2010, Allegheny shareholders would receive a value of $27.65 per share, or $4.7 billion in the aggregate. FirstEnergy will also assume approximately $3.8 billion in Allegheny net debt. The price per share represents a premium of 31.6 percent to the closing stock price of Allegheny on Feb. 10, 2010, and a 22.3% premium to the average stock price of Allegheny over the last 60 days ending Feb. 10.
Following the completion of the merger, it is anticipated that FirstEnergy shareholders would own approximately 73 percent and Allegheny shareholders would own approximately 27 percent of the combined company.
The transaction is anticipated to be accretive to FirstEnergy earnings in the first year
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