First Energy Corp Proposes Acquisition of Allegheny Energy

First Energy Corporation has agreed to acquire Allegheny Energy Inc. for $4.7 billion in a stock deal that would create a company with 10 utilities and six million customers stretching across seven states. The combined company would have $16 billion in annual revenue and $1.4 billion in expected net income from utilities in the traditionally regulated states of Virginia and West Virginia and deregulated states of Ohio, Maryland, New Jersey, New York and Pennsylvania.

It would have 24,000 megawatts of power generation, dominated by coal but including nuclear, gas and a small amount of renewable energy. The merger will have to be approved by state state regulators. The key states for the companies will be Maryland, Pennsylvania and West Virginia. Allegheny also will need approval in Virginia. (WSJ, 2/11/10)