Biggest deal in energy history: AI boom will bring a giant to market
US energy giant NextEra Energy has agreed to buy Dominion Energy in a deal worth about $67 billion. This is a record takeover in the history of the global energy industry: the combined entity will be the largest regulated power company.
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NextEra, the largest utility company in the S&P 500, will buy another key player in this market, Dominion, which provides power to the world's largest data center market in northern Virginia. The combined entity will have a market capitalization of $249 billion, making it the third most capitalized company in the energy sector after oil giants Chevron and Exxon Mobil, CNBC notes.
The new player will continue to operate under the NextEra brand. It will be a global leader in renewable energy, the first natural gas-fired power producer in the U.S. and will rank second in nuclear generation, the company said in a statement.
Under the terms of the deal, Bloomberg writes, NextEra will pay the equivalent of about $76 per share for Dominion. This implies a premium of 23% to the closing price of Friday, Ma. 15. NextEra shareholders will receive 74.5% of the combined company, while Dominion shareholders will receive 25.5%.
Dominion shares jumped 11.7% in early trading on May 18 before slowing to about 9%. Quotes NextEra declined by 6.3%. Since the beginning of the year, the securities of both companies rose by 15% and 10%, respectively.
The main reason for the deal is the explosive growth in power consumption of data centers for artificial intelligence, Bloomberg notes. The data center market is already experiencing an acute shortage of capacity, the agency writes. "Demand for power is growing faster than at any time in decades," NextEra CEO John Ketcham said in a press release.
U.S. summer peak energy use will grow by 224 GW over the next ten years - equivalent to adding about 180 million households, according to data from electric grid reliability regulator NERC cited by Bloomberg.
The deal is expected to close in a year or a year and a half. However, it is "likely to face significant scrutiny" from regulators, warned Everscore analyst Nicholas Amicucci.
This article was AI-translated and verified by a human editor
