BEC and Commonwealth join forces
BEC Energy and Commonwealth Energy System have announced that they are combining to create a new holding company with a total market capitalization of $4.4bn. The merger will provide both companies with a strong base from which to compete in the deregulated Massachusetts electricity market.
The combined company will serve around 1.3m electricity and gas customers throughout the state. Under the deal, both BEC and Commonwealth will exchange their shares for a combination of stock in the holding company and cash.
The new holding company will be one of the biggest utility companies in New England. Both companies state that their primary concern will be to focus on transmission and distribution, and growing customer base. Analysts believe that this is the first of many similar mergers in the region.
The boards of both companies have approved the deal, which values Commonwealth at $950m. The transaction is still subject to approval from the companies` shareholders and from federal and state authorities.
BEC had revenue of more than $1.7bn in 1997, when Commonwealth had revenues of more than $1bn.