NextEra Energy, Inc. and Dominion Energy, Inc. have agreed to combine in an all-stock transaction that would create the world's largest regulated electric utility business by market capitalization.

The deal would unite two of the country's most prominent energy companies into a single entity serving approximately 10 million customer accounts across Florida, Virginia, North Carolina, and South Carolina.

Deal Structure and Ownership Split

Under the terms of the definitive agreement, Dominion Energy shareholders will receive a fixed exchange ratio of 0.8138 shares of NextEra Energy for each share of Dominion Energy they own at the time the transaction closes.

Upon completion, NextEra Energy shareholders will own approximately 74.5% of the combined company, with Dominion Energy shareholders holding the remaining 25.5%. The transaction is structured as a 100% stock-for-stock deal and is expected to be tax-free to shareholders of both companies.

The combined company will operate under the NextEra Energy name and continue to trade on the New York Stock Exchange under the ticker symbol NEE. The deal is described as immediately accretive at closing to adjusted earnings per share.

Scale and Generation Capacity

The merger would produce an energy company owning 110 gigawatts of generation across a broad mix of energy sources, with more than 130 gigawatts of large-load opportunities already in its development pipeline.

The combined company's operations would be more than 80% regulated, with the balance consisting of long-term contracted businesses. The companies said growth drivers are expected to be evenly balanced between these two segments.

The combined platform is projected to support 11% annual growth in regulatory capital employed, with the companies projecting adjusted earnings per share growth of 9% or more through 2032.

NextEra Energy said it expects to improve its existing credit rating thresholds as a result of the combination, while Dominion Energy and Dominion Energy Virginia are expected to benefit from improved ratings and related reductions in financing costs.

Customer Bill Credits and Affordability Commitments

A central element of the announcement is a proposal to provide USD 2.25 billion in bill credits for Dominion Energy's customers across Virginia, North Carolina, and South Carolina.

Those credits would be spread over two years following the close of the transaction. The companies framed the commitment as part of a broader affordability strategy that they say will be reinforced over the long term through the enhanced scale the merger creates in operations, procurement, construction, and financing.

The companies argued that operating at a greater scale will allow the combined entity to buy, build, finance, and operate more efficiently, ultimately translating into more affordable electricity for customers as demand for power continues to grow.

Leadership and Headquarters Arrangements

John Ketchum, currently chairman, president, and chief executive officer of NextEra Energy, will serve as chairman and chief executive officer of the combined company. Robert Blue, currently leading Dominion Energy, will serve as president and CEO of regulated utilities and will join the board of directors of the combined company.

Subsidiary leadership roles were also announced. Edward Baine will be president and CEO of Dominion Energy Virginia, Keller Kissam will be president and CEO of Dominion Energy South Carolina, and Scott Bores will be president and CEO of Florida Power & Light Company.

The combined company will maintain dual headquarters in Juno Beach, Florida, and Richmond, Virginia. Dominion Energy South Carolina's existing operational headquarters in Cayce, South Carolina, will serve as the operational headquarters for that subsidiary. The companies stated they will provide robust employee protections and enhanced charitable giving as part of the combination.

Dominion Energy's utility subsidiaries will continue to operate under their existing names: Dominion Energy Virginia, Dominion Energy North Carolina and Dominion Energy South Carolina.

Strategic Rationale and Market Context

The companies cited rising electricity demand as a primary driver of the decision to combine. In a statement accompanying the announcement, Ketchum said electricity demand is rising faster than it has in decades, with projects becoming larger and more complex. He emphasized that the rationale for the merger is rooted in operational and financial efficiency rather than size for its own sake.

"Scale translates into capital and operating efficiencies," Ketchum said. "It enables us to buy, build, finance, and operate more efficiently, which translates into more affordable electricity for our customers in the long run."

The four states in which the combined company will primarily operate, Florida, Virginia, North Carolina, and South Carolina, were described by the companies as four of the fastest-growing states in the country. The combined company said it will focus its investment strategy on meeting surging power demand in those markets while keeping customer bills affordable.

The companies also highlighted their combined supply chain, construction, technology, and operational capabilities as tools that will allow the new entity to deliver the generation, transmission, and grid investments customers and the broader economy require. The announcement described the combined platform as North America's premier energy infrastructure developer.

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