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Parents Of Two Retail Suppliers Announce Merger

January 2, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Dominion Energy, Inc. and SCANA Corporation today announced an agreement for the companies to combine in a stock-for-stock merger in which SCANA shareholders would receive 0.6690 shares of Dominion Energy common stock for each share of SCANA common stock, the equivalent of $55.35 per share, or about $7.9 billion based on Dominion Energy's volume-weighted average stock price of the last 30 trading days ended Jan. 2, 2018.

Including assumption of debt, the value of the transaction is approximately $14.6 billion.

Dominion is the parent of retail supplier Dominion Energy Solutions, which serves 335,000 natural gas customers and 1.1 million products and services customers (average customer count for the three months ended September 30, 2017)

SCANA is the parent of SCANA Energy, which sells natural gas to approximately 450,000 customers in Georgia (as of December 31, 2016)

Dominion said that the transaction, "supports Dominion Energy’s focus on non-commodity, regulated energy infrastructure," and increases the earnings contribution from regulated service.

Dominion said that the transaction would be accretive to Dominion Energy's earnings upon closing, which is expected in 2018 upon receipt of regulatory and shareholder approvals. The merger also would increase Dominion Energy's compounded annual earnings-per-share target growth rate through 2020 to 8 percent or higher, the company said

The transaction includes various benefits targeted to SCE&G regulated customers to offset previous and future costs related to the withdrawn V.C. Summer Units 2 and 3 nuclear project, such as $1.7 billion of nuclear capital and regulatory assets never to be collected from customers. Dominion executives said that to the extent South Carolina policymakers seek additional conditions which would be deleterious financially to the proposed transaction, Dominion would not continue with the proposed transaction.

Dominion said that, "The combination with SCANA would solidify Dominion Energy's position among the nation's largest and fastest-growing energy utility companies by adding significantly to its presence in the expanding Southeast markets. SCANA's operations include service to approximately 1.6 million electric and natural gas residential and business accounts in South Carolina and North Carolina and 5,800 megawatts of electric generation capacity. SCANA continues to experience strong growth in both customer count (more than 2 percent on average annually at SCE&G and PSNC Energy) and weather-normalized energy sales."

Once the merger is completed, the combined company would operate in 18 states from Connecticut to California. The company would deliver energy to approximately 6.5 million regulated customer accounts in eight states and have an electric generating portfolio of 31,400 megawatts and 93,600 miles of electric transmission and distribution lines. It also would have a natural gas pipeline network totaling 106,400 miles and operate one of the nation's largest natural gas storage systems with 1 trillion cubic feet of capacity.

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