and announced April 4 theyhave reached a settlement agreement with most intervenors and regulatory staff ofthe Georgia Public Service Commission regarding the proposed merger of the two companies.
Georgiaregulators are currently scheduled to vote on the merger May 24. The companies announcedthe $11.5 billion deal,in which Southern would acquire AGL for about $66 per share, or a 36.3% premium,in August 2015. The companiesfiled for approval with Georgia regulators inDecember 2015. Both companies are headquartered in Atlanta.
If theGeorgia PSC approves the terms of the settlement, according to a Form 8-K filedApril 4, they would become the obligations of the applicants, including Southernsubsidiary Georgia Power Co.and AGL subsidiaries Atlanta Gas LightCo. and Southstar EnergyServices LLC, which does business as Georgia Natural Gas.
Underthe terms of the settlement, Georgia Power's alternative rate plan for 2014 to 2016would extend through the end of 2019 and Georgia Power would be required to fileits next retail rate case July 1, 2019. The settlement also requires Georgia Powerand Georgia Natural Gas to separate their operations for at least three years followingthe deal's close in ways including: a prohibition of joint sales teams and combinationbilling; a prohibition of Georgia Power call center or customer service representativesrecommending the selection of Georgia Natural Gas as a gas marketer; and a prohibitionon the two utilities sharing customer information.
Additionally,Georgia Power and Atlanta Gas Light must retain savings from the merger, net oftransition costs, through the end of 2022, with net merger savings to be sharedwith customers receiving 60% and the utilities receiving 40%. After 2022, all mergersavings would be retained by customers, according to the filing.
The dealis also subject to approval in Illinois, New Jersey, Maryland and Virginia, whereit received approval inFebruary. The companies plan to close the merger during the second half of 2016.