Duke Energy/Progress Energy, Inc.

On January 10, 2011, Duke Energy (NYSE: DUK) and Progress Energy, Inc. (NYSE: PGN) announced that they have entered into a definitive merger agreement whereby Progress Energy's shareholders will receive 2.6125 shares of common stock of Duke Energy in exchange for each share of Progress Energy common stock.

The stock acquisition is valued at $46.48 per share, or a total consideration of $13.7 billion.

Duke Energy also will assume approximately $12.2 billion in Progress Energy net debt. The transaction price represents a 7.1% premium to the unaffected closing stock price of Progress Energy on Januay 5, 2011, and a 3.9 percent premium to the closing stock price of Progress Energy on Jan. 7, 2011.

The combination is anticipated to be accretive to Duke Energy's adjusted earnings in the first year after closing.

Closing is expected prior to the end of FY11.

J.P. Morgan served as lead financial advisor and provided a fairness opinion to Duke Energy, and BofA Merrill Lynch also provided a fairness opinion to Duke Energy. Lazard Freres served as lead financial advisor and provided a fairness opinion to Progress Energy, and Barclays Capital also served as a financial advisor and provided a fairness opinion to Progress Energy.

Wachtell, Lipton, Rosen & Katz served as legal counsel for Duke Energy. Hunton & Williams LLP served as legal counsel for Progress Energy.

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