The entire deal, including debt, is estimated at $12 billion.
Southern will pay $66 cash per AGL share. The total equity value of the purchase is approximately $8 billion.
With AGL as part of the Southern Company mix, it will make it the nation’s second-largest utility provider in terms of customers served.
The purchased is prompted by Southern Co.’s desire to capitalize on the growing demand for natural gas.
AGL, also based in Atlanta, provides regulated gas distribution and serves retail customers under its SouthStar Energy Services and Pivotal Home Solutions ventures.
Fanning told the Atlanta Journal-Constitution that a major impetus for the deal was the ongoing transition away from coal as an energy source to natural gas, solar, and nuclear.
The combined company will have a generation capacity of nearly 46 gigawatts and will operate close to 200,000 miles of electric lines and over 80,000 miles of gas pipelines.
“We rate AGL RESOURCES INC (GAS) a BUY”.
The company also has three natural gas storage businesses: Central Valley Gas Storage, Golden Triangle Storage and Jefferson Island Storage & Hub. The transaction is likely to close in the second half of 2016. Citigroup Global Markets Inc.is serving as the exclusive financial advisor and Jones Day, Gibson Dunn & Crutcher LLP and Troutman Sanders LLP are serving as legal counsel to Southern Company. It still needs approval from AGL shareholders and certain state utility and other regulatory commissions. AGL Resources is a Fortune 500 company and a member of the S&P 500 Index.