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Duke Energy (DUK) Completes Merger w/ Progress; Appoints New CEO; Updates FY12 EPS Outlook on 1-for-3 Rev. Split

July 3, 2012 7:05 AM EDT Send to a Friend
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Duke Energy Corporation (NYSE: DUK) today confirmed the closing of its previously announced merger with Progress Energy Inc., effective July 2, 2012.

The new company will be known as Duke Energy and will remain headquartered in Charlotte, with substantial operations in Raleigh, N.C. Duke Energy will trade on the New York Stock Exchange under the symbol DUK.

In accordance with the terms of the merger agreement, Progress Energy Inc. has become a wholly owned direct subsidiary of Duke Energy, creating the country's largest electric utility as measured by enterprise value, market capitalization, generation assets, customers and numerous other criteria.

Duke Energy also announced today the newly constituted board of directors has appointed Jim Rogers as president and chief executive officer of the combined company, effective immediately. Rogers will also maintain his responsibilities as chairman of the company's board. Bill Johnson has resigned as president and chief executive officer of the combined company, by mutual agreement.

2012 Earnings Guidance
On a standalone basis, Duke Energy had an adjusted diluted earnings per share (EPS) guidance range for 2012 of $1.40 to $1.45. Due to the effect of the 1-for-3 reverse stock split, which was completed in connection with this merger transaction, this guidance range is the equivalent of $4.20 to $4.35 per share. The combined company continues to target a 2012 adjusted diluted EPS guidance range of $4.20 to $4.35.

The Street was looking for unadjusted EPS of $1.43.

The new Duke Energy has approximately $49 billion in market capitalization, total assets of more than $100 billion, and 7.1 million electric customers in the Carolinas, Florida, Indiana, Kentucky and Ohio. The regulated utilities will comprise a higher proportion of Duke Energy's post-merger business mix

Duke Energy's major commercial operations include Duke Energy International, which operates power plants in Central and South America; Duke Energy Renewables, which develops and owns wind and solar projects in the U.S.; and Duke Energy's Midwest generation and Duke Energy Retail, which generate, market and sell electricity in the Midwest.

Under the terms of the merger agreement, each share of Progress Energy common stock has been converted into the right to receive 0.87083 shares of Duke Energy common stock (which reflects the impact of the 1-for-3 reverse stock split that occurred immediately prior to the closing of the merger).

The reverse stock split is designed to reduce the number of outstanding Duke Energy shares.

When the merger was announced on Jan. 10, 2011, the transaction value totaled $26 billion, including Progress Energy's debt. Today, based on Duke Energy's share price and including Progress Energy's debt, the transaction is valued at about $32 billion.




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