The Virginia power company, Dominion Energy, is to buy Scana Corp, the utility company based in South Carolina.
The stock-for-stock deal, which values Scana at approximately $7.9bn, will include the utility company’s debt.
Subsequent to the announcement of the deal, Scana’s shares surged 27% in premarket trading.
The deal, valued at $14.6bn, is to be Dominion’s largest ever acquisition.
The two companies revealed that the utility’s shareholders are to receive 0.6690 shares of Dominion Energy per share held in Scana, which is approximately $55.35.
The Richmond-based company will be offering $1,000 payments to the average residential customer, whilst also committing to 5% rate cuts.
“Dominion acquiring Scana makes a lot of sense,” commented Shahriar Pourreza, an analyst for Guggenheim Securities.
Scana’s shares dropped rapidly between June 2017 and this month, falling from trading at $70 to just $48.
“Dominion is still going to have a very big uphill climb” added Mr Pourreza.