Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nyse  >  Northeast Utilities System    NU

SummaryChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets

Massachusetts Approval Seals Northeast Utilities-NStar Merger

share with twitter share with LinkedIn share with facebook
share via e-mail
0
04/06/2012 | 12:42am CEST

--Northeast Utilities, NStar get final regulatory approval for $4.7 billion merger

--Northeast Utilities to buy NStar in all-stock deal companies aim to close by Tuesday

--The combination of the northeastern companies is the latest in a string of utility mergers

(Adds analysts' comments in the ninth paragraph.)

 
   By Cassandra Sweet 
   Of  
 

Massachusetts regulators Thursday approved the proposed $4.7 billion merger of Northeast Utilities (>> Northeast Utilities System) and NStar (NST), allowing the companies to close the deal.

Northeast Utilities, of Hartford, Conn., plans to buy Boston-based NStar in an all-stock deal that the companies said they plan to close Tuesday.

The Massachusetts Department of Public Utilities approved settlement agreements with the companies that include a rate freeze through 2016 and a one-time credit of $21 million for customers of NStar utilities. The companies also have to provide additional financial information requested by the department by April 15, 2015.

"Today marks a historic day for our companies and our customers," NStar Chairman and Chief Executive Thomas May said in a statement.

The combination of the two northeastern utility holding companies is the latest in a string of utility mergers, as companies that deliver electricity and natural gas look for ways to cut costs, pool their resources and gain market share.

U.S. power giant Exelon Corp. (EXC) closed its $7.9 billion acquisition of Constellation Energy Group last month. Two other large utilities, Duke Energy Corp. (DUK) and Progress Energy Inc. (PGN), are seeking federal approval to complete their proposed $13.7 billion merger.

Shares of Northeast Utilities closed 0.4% lower at $36.89, while NStar shares closed 0.6% lower at $48.30, amid a broader drop among utility stocks.

Some analysts said the merger would be positive, as long as Northeast Utilities can increase demand and sign up new customers.

The cost savings and "synergies," along with being able to avoid rate cases until the rate freezes end are pluses, said analysts at Macquarie Group Ltd. (MQBKY, MQG.AU). However, risks remain, such as "potential delays, downsizing or cancellations of large-scale transmission projects" on which Northeast would earn a return, the analysts said.

Standard & Poor's Ratings Services raised its rating on Northeast Utilities and its subsidiaries while cutting its rating on NStar and its subsidiaries, in anticipation of the merger.

The Connecticut Public Utilities Regulatory Authority approved the companies' merger earlier this week. The companies pledged to give customers of Northeast Utilities's Connecticut Light & Power utility a one-time, $25 million credit on their utility bills and a rate freeze until Dec. 1, 2014. Northeast also agreed to spend $300 million to beef up the Connecticut utility's electricity distribution system and keep its headquarters in Hartford for at least seven years, among other commitments.

The companies also obtained merger approval from the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission, the Securities and Exchange Commission and the Federal Communications Commission.

Northeast provides power to more than 2 million customers in Connecticut, New Hampshire and Massachusetts, while NStar delivers electricity and gas to about 1.4 million customers.

S&P raised its rating on Northeast Utilities to A-minus from triple-B-plus. Subsidiaries Connecticut Light & Power, Public Service Co. of New Hampshire, Western Massachusetts Electric Co. and Yankee Gas Services Co. were also upgraded one notch to A-minus, six levels below a top-grade triple-A rating.

NStar and subsidiaries NStar Electric Co. and NStar Gas Co. were downgraded two notches, to A-minus from A-plus.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@dowjones.com

--Ben Fox Rubin contributed to this article.

Stocks mentioned in the article : Northeast Utilities System
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on NORTHEAST UTILITIES SYSTEM
08/21 EVERSOURCE ENERGY : Upgrading Electric System in Putnam
08/18 EVERSOURCE ENERGY : North Hampton Town seeks to intervene in sale of Aquarion Wa..
08/17 HOUSE HUNTERS : Energy Efficiency Edition
08/16 EVERSOURCE ENERGY : linking gas lines in Cheshire
08/16 EVERSOURCE ENERGY : New Boston Upgrades Will Strengthen Energy System
08/15 EVERSOURCE ENERGY : Invests Millions to Strengthen Natural Gas Distribution Syst..
08/15 EVERSOURCE ENERGY : Northern Pass Achieves Major Federal Permitting Milestone
08/15 EVERSOURCE ENERGY : North Hampton Town seeks to intervene in sale of Aquarion Wa..
08/14 EVERSOURCE ENERGY : State rep pushes to stop sale of Aquarion Water Petition mu..
08/14 EVERSOURCE ENERGY : State Rep
More news
News from SeekingAlpha
2015 Northeast Utilities downgraded at Credit Suisse on lack of clarity
2015 Investors pulling the plug on utilities as Treasury yields rise
2015 Northeast Utilities (NU) Q4 2014 Results - Earnings Call Transcript
2015 Northeast Utilities Systems beats by $0.03, beats on revenue
2015 Notable earnings after Wednesday's close
Financials ($)
Sales 2017 7 827 M
EBIT 2017 1 942 M
Net income 2017 1 005 M
Debt 2017 11 452 M
Yield 2017 3,02%
P/E ratio 2017 19,93
P/E ratio 2018 18,90
EV / Sales 2017 4,01x
EV / Sales 2018 3,99x
Capitalization 19 954 M
Chart NORTHEAST UTILITIES SYSTEM
Duration : Period :
Northeast Utilities System Technical Analysis Chart | NU | US6643971061 | 4-Traders
Income Statement Evolution
Consensus
 
Mean consensus OUTPERFORM
Number of Analysts 15
Average target price 63,5 $
Spread / Average Target 0,78%
EPS Revisions
Managers
NameTitle
James J. Judge President, Chief Executive Officer & Trustee
Werner J. Schweiger Chief Operating Officer & Executive Vice President
Philip J. Lembo Chief Financial Officer, Treasurer & Executive VP
Christine M. Carmody EVP-Human Resources & Information Technology
Cotton Mather Cleveland Independent Trustee
Sector and Competitors
1st jan.Capitalization (M$)
NORTHEAST UTILITIES SYSTEM-1.91%19 954
DUKE ENERGY CORP11.54%60 602
IBERDROLA11.74%51 923
DOMINION ENERGY INC2.81%50 597
SOUTHERN CO-1.83%48 265
EXELON CORPORATION6.96%36 445