NextEra Energy to Acquire Two FL Utilities, Energy Plants in More Than $6B Deal
The deal announced today between NextEra Energy of Juno Beach, FL and Southern Co. of Atlanta includes the assumption of $1.4 billion of Gulf Power debt.
JUNO BEACH, FL—NextEra Energy, Inc. has reached an agreement to acquire Southern Company’s Gulf Power and Florida City Gas operations, as well as ownership interests in the Oleander and Stanton natural gas and electric energy plants in Florida in a deal totaling $6.475 billion.
The deal announced today between NextEra Energy of Juno Beach, FL and Southern Co. of Atlanta includes the assumption of $1.4 billion of Gulf Power debt. NextEra Energy intends to finance the approximately $5.1 billion purchase price through the issuance of new debt. NextEra Energy is expected to continue to maintain $5 billion to $7 billion of excess balance sheet capacity, while maintaining its current strong credit ratings, Jim Robo, chairman and CEO of NextEra Energy, said in the announcement released today.
The deal involves the purchase of Gulf Power, which serves approximately 450,000 customers in eight counties throughout northwest Florida and has roughly 9,500 miles of power lines and 2,300 megawatts of electric generating capacity. NextEra Energy expects to complete the acquisition of Florida City Gas in the third quarter of this year. The purchase of Gulf Power and the natural-gas generating plants are anticipated to close in the first half of 2019.
Florida City Gas currently serves approximately 110,000 residential and commercial natural-gas customers in Florida’s Miami-Dade, Brevard, St. Lucie and Indian River counties with 3,700 miles of natural gas pipelines.
The transaction with Southern Co. also includes the 100% ownership interest in Plant Oleander, a 791MW natural-gas fueled, simple-cycle combustion turbine electric generation plant located near Cocoa, FL and power purchase agreements with the Florida Municipal Power Agency and Seminole Electric Cooperative.
NextEra will also purchase 65% ownership interest in Stanton Energy Center, a combined-cycle 660MW electric generating plant near Orlando. The 65% interest is contracted with the Orlando Utilities Commission and Florida Municipal Power Agency.
“This sale provides Southern Company the opportunity to deliver great value to our organization, bolster our financial profile and continue to build the future of energy as one of America’s premier energy companies,” said Thomas A. Fanning, chairman, president and CEO of Southern Co. “These Florida businesses are being sold at a price that provides substantial value to our stockholders, while entrusting the customers of these exceptional franchises to a high-quality utility company that has a well-established presence in the state.”
BofA Merrill Lynch, acting as the lead, and Goldman Sachs & Co. LLC are serving as financial advisors to NextEra Energy. In addition, Wachtell, Lipton, Rosen & Katz is acting as counsel, and Skadden, Arps, Slate, Meagher and Flom, LLC is acting as regulatory counsel to NextEra Energy.
Citigroup Global Markets Inc. is serving as the exclusive financial advisor and Jones Day, Troutman Sanders LLP and Gibson Dunn & Crutcher LLP are serving as legal counsel to Southern Co. in the transaction.