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Dominion, SCANA close merger

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Dominion, SCANA close merger

Dominion Energy Inc. completed the acquisition of SCANA Corp. in a transaction valued at more than $14 billion.

Under the deal, SCANA shareholders received 0.6690 shares of Dominion's common stock for each share of SCANA for a conversion of $6.8 billion. Dominion will also assume approximately $6.6 billion in SCANA consolidated net debt.

Dominion agreed to freeze base rates for SCANA subsidiaries South Carolina Electric & Gas Co.'s electric customers at current levels until Jan. 1, 2021, and for Public Service Co. of North Carolina Inc.'s customers until at least Nov. 1, 2021. The company will also appoint a member of SCANA's board or executive management team to Dominion's board, according to a Jan. 2 release.

SCE&G, PSNC Energy and Scana Energy Marketing Inc., along with its services company, will be managed by Dominion's Southeast Energy Group.

With SCANA, Dominion will operate in 18 states from Connecticut to California, serving approximately 3.3 million electric utility customers, 3.3 million natural gas customers and 800,000 competitive and regulated, last-resort natural gas customer in states with competitive markets.

Dominion's operations now include an electric generating portfolio of about 31,000 MW and 93,600 miles of electric transmission and distribution lines as well as a natural gas pipeline network totaling 106,400 miles and natural gas storage systems with 1 Tcf of capacity, according to the news release.

Under the plan recently approved by South Carolina regulators, Dominion will provide more than $2 billion in customer refunds over a 20-year period related to the abandoned expansion of V.C. Summer nuclear units 2 and 3. Dominion will lower nuclear cost recovery to about $2.77 billion from $3.33 billion over a 20-year amortization period and reduce rates for SCANA customers approximately 15% by eliminating nuclear cost recovery after March 12, 2015.

Dominion will also absorb about $2.5 billion in financing obligations, regulatory assets and costs associated with the acquisition of the 540-MW, combined-cycle Columbia Energy Center.

Friends of the Earth and the Sierra Club filed a petition Dec. 24, 2018, for rehearing or reconsideration of the South Carolina Public Service Commission's approval of the merger.

SCANA on Jan. 2 will pay the last declared dividend of 12.37 cents per share to shareholders of record at the close of business Dec. 10, 2018. The company's common stock has stopped trading on the NYSE.

McGuireWoods LLP served as legal counsel to Dominion. Credit Suisse Securities (USA) LLC acted as the company's financial adviser for the transaction.

Mayer Brown LLP acted as legal counsel to SCANA. Morgan Stanley & Co. LLC and RBC Capital Markets LLC served as financial advisers to SCANA.