Tags: US | PPL | Kentucky | Utilities

PPL to Acquire E.On Kentucky Utilities for $6.7 Billion

Thursday, 29 Apr 2010 07:18 AM

Power company PPL Corp. said Wednesday it has agreed to acquire the parent company of Kentucky's two major utilities for $6.7 billion in cash.

PPL said it is buying E.On U.S. LLC, the parent of Louisville Gas & Electric Co. and Kentucky Utilities Co., from German power company E.On AG. Together, the utilities have about 1.2 million customers.

PPL will assume $925 million of debt and get a tax benefit of about $540 million. The company said it may sell some non-core assets to pay for part of the buyout.

The company said it will leave the utilities' main headquarters in Louisville, Ky., and indicated it did not expect to lay off Kentucky workers.

After the acquisition, which is expected to close by the end of the year, PPL said it predicts annual revenue to total about $10 billion. The company expects to serve nearly 5 million electricity customers in the U.S. and the U.K.

The deal will modestly reduce in the first year after it closes, PPL said in a statement. The acquisition is expected to increase earnings by 2013.

The buyout requires approvals by state regulators in Kentucky, Virginia and Tennessee and by the Federal Energy Regulatory Commission.

PPL also released preliminary financial results for the first quarter Wednesday. The power company said it earned 94 cents per share on an adjusted basis, compared with 60 cents per share in the first quarter of 2009. Analysts predict earnings of 86 cents per share, according to a Thomson Reuters poll.

For the full year, PPL maintained its guidance for adjusted net income of $3.10 to $3.50 per share. Analysts forecast income of $3.33 per share.

The company is scheduled to report its quarterly earnings on May 6.

Shares of PPL fell $2.13, or 7.7 percent, to close at $25.60. They earlier hit a 52-week low of $25.54 ahead of the announcement.

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Power company PPL Corp. said Wednesday it has agreed to acquire the parent company of Kentucky's two major utilities for $6.7 billion in cash.PPL said it is buying E.On U.S. LLC, the parent of Louisville Gas Electric Co. and Kentucky Utilities Co., from German power...
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2010-18-29
Thursday, 29 Apr 2010 07:18 AM
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