Duke Energy to Sell Tennessee Natural Gas Business to Spire for $2.48B

SEATTLE (Oil Monster): Duke Energy (NYSE:DUK) announced Tuesday it has reached an agreement to sell its Piedmont Natural Gas Tennessee local distribution company to Spire Inc. (NYSE:SR) for $2.48 billion in cash. According to InvestingPro data, this acquisition represents more than half of Spire’s current market capitalization of $4.47 billion.

The transaction, which represents 1.8 times the 2024 year-end rate base and 24 times 2024 earnings, is expected to close in the first quarter of 2026, subject to regulatory approvals. Spire currently operates with a debt-to-equity ratio of 1.46x, making financing structure crucial for this significant acquisition.

Duke Energy plans to use approximately $800 million of the proceeds to offset debt at Piedmont Natural Gas, with the remaining $1.5 billion helping to fund the company’s $83 billion five-year capital plan focused on energy modernization investments.

"The transaction allows us to efficiently fund accelerating investment opportunities driven by record customer growth and a deepening economic development pipeline," said Harry Sideris, Duke Energy president and chief executive officer, in a press release statement.

The sale includes nearly 3,800 miles of distribution and transmission pipelines and a liquefied natural gas facility serving approximately 205,000 customers in the Greater Nashville area. Employees who primarily support the Tennessee business will transition to Spire.

Scott Doyle, president and CEO of Spire, said the acquisition will expand Spire’s utility customer base to nearly two million homes and businesses. "We’re eager to build on the foundation of exceptional customer service and community engagement that Piedmont Natural Gas customers in Tennessee have enjoyed for years," Doyle stated.

The transaction requires approval from the Tennessee Public Utility Commission and clearance under the Hart-Scott-Rodino Act.

JP Morgan Securities LLC and RBC Capital Markets LLC served as Duke Energy’s financial advisors for the transaction, which comes as Duke Energy continues to execute its energy transition strategy.

Courtesy: www.investing.com