March 2016, Vol. 243, No. 3
In The News
Dominion Resources Buying Questar Corp. in $4.4 Billion Deal
Dominion Resources Inc. is buying Questar Corp. for $4.4 billion, the latest in a move of power producers seeking to acquire more natural gas distribution assets. The deal was announced Feb. 1 and follows Duke Energy’s effort to buy Piedmont Natural Gas Co for $4.9 billion, and Southern Co.’s $8 billion deal for AGL Resources Inc.
Among the reasons cited by analysts is the fact that power generation companies are being hurt by weak power demand due to mild weather. Dominion’s $25-per-share offer represents a premium of nearly 23% to Questar shareholders. Dominion will assume $1.6 billion of Questar’s debt as part of the deal which is expected to close at year end.
With Questar’s acquisition, Dominion will get about 27,500 miles of gas distribution pipelines, 3,400 miles of gas transmission pipeline and 56 Bcf of working gas storage. The combined company will serve 2.5 million electric utility customers and 2.3 million gas utility customers. Questar will operate as a unit of Dominion. The company’s pipeline assets will be dropped into Dominion’s master limited partnership, Dominion Midstream Partners LP.
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