Duke's $4.9B acquisition of Piedmont clears federal regulatory hurdle

Dive Brief:

Duke Energy announced yesterday that the Federal Trade Commission (FTC) granted early termination under the federal Hart-Scott-Rodino Antitrust Improvements Act, clearing the way for its proposed $4.9 billion acquisition of Piedmont Natural Gas.
The companies must still file for approval in North Carolina, where Charlotte Business Journal reports they are likely to face opposition surrounding Duke's growing ties to natural gas and the company's increasing influence in the region.
The deal would add about 1 million new gas customers to Duke's service territory, returning the company to the gas business for the first time since 2007. Piedmont and Duke are also partners on the proposed 550-mile Atlantic Coast Pipeline, along with project lead Dominion, a Virginia-based investor-owned utility.

Dive Insight:

The Duke-Piedmont deal may have cleared the first of two regulatory hurdles, but FTC's Hart-Scott-Rodino signoff was always likely going to be the easy one. Charlotte Business Journal reports the companies must still file for approval in North Carolina, where local opponents are expected to challenge the deal.

According to the news outlet, environmental and consumer advocacy group NC WARN has opposed Duke's growing reliance on gas-fired power and has already been critical of the proposed acquisition; others are expected to raise objections to the company's growing position in the state.

Duke said it has not yet determined when it will make a filing with North Carolina regulators. In addition, the company will be providing information on the deal to regulators in South Carolina and Tennessee, though their approval is not necessary. Piedmont shareholders will also need to sign off.

Duke said the deal is expected to close by the end of 2016; the merger was announced in October.

If completed, the deal would put Duke back in the natural gas business for the first time since 2007. The company spun off Spectra Energy, an operator of pipelines and liquefied natural gas facilities, after its merger with Cinergy in 2006.

The deal has also forced a restructuring of Atlantic Coast Pipeline ownership due to clauses that no party can own a majority stake, and that Dominion must remain the lead owner. Duke owns 40%, as does Dominion, but Piedmont's 10% stake would tip the balance. The pipeline is designed to move natural gas supplies from West Virginia down through North Carolina.