Dominion Resources buys Questar for US$4.4B
The move marks a push west for east coast energy giant Dominion
NEW YORK—Dominion Resources will spend approximately $4.4 billion to acquire Questar in a big reach to the West for the East Coast energy company.
Dominion is a power producer in the mid-Atlantic region. Questar is in the Rockies and a principal source of gas supply to Western states.
There was a rush of deals last year among energy companies who are bulking up with demand weak and energy prices plunging.
That includes utilities, which are increasingly switching from coal to natural gas, as they seek more control over their cost input.
Last year Duke Energy Corp., a major power provider in the Southeast, spent almost $5 billion to acquire Piedmont Natural Gas Co.
Dominion, with Questar, would serve about 4.8 million electric and gas customer accounts in seven states and would operate more than 15,500 miles of natural gas transmission, gathering and storage pipelines.
Questar shareholders will receive $25 per share, a 23 per cent premium to its Friday closing price of $20.39. The deal also includes the assumption of Questar’s outstanding debt.
Questar Corp. will keep its headquarters in Salt Lake City. Its stock surged more than 20 per cent Monday before the opening bell.
The transaction is targeted to close by the end of the year, according to Richmond, Virginia-based Dominion Resources Inc. The deal still needs approval from Questar shareholders and clearance from the Federal Trade Commission.
The companies said that, if needed, they will file for review and approval from the Utah Public Service Commission and the Wyoming Public Service Commission and will give information about the transaction to the Idaho Public Utilities Commission.