NextEra snubbed in utility deal

NextEra Energy Inc., the world’s largest utility owner by market value, recently made an unsuccessful bid to take over power giant Duke Energy Corp. in what could have been largest utility deal in American history, according to people familiar with the matter.

NextEra, based in Juno Beach, Fl., is still interested in pursuing a deal and is working with banks to help arrange financing for a potential transaction, said the people, who asked not to be identified because the details aren’t public.

A merger of America’s two largest utility owners would create a powerhouse dictating where more than 13 million homes and businesses get their power across two regions that remain heavily dependent on coal, the U.S. South and Midwest. NextEra became the world’s first utility to top a market valuation of $100 billion last year thanks in large part to its cleanpower business, and Charlotte, N.C.-based Duke has laid out its own plan to transition away from fossil fuels to renewable energy to fight global warming.

NextEra owns two utilities that serve more than 5 million customers, and has wind and solar farms in about two U.S. states and four Canadian provinces. The company has been hunting for a big utility takeover for years after attempts to buy Hawaiian utility Hawaiian Electric Industries Inc. and Texas electric distributor Oncor Electric Delivery Co. failed. It announced just Tuesday that it had agreed to buy GridLiance, which owns about 700 miles of highvoltage transmission lines, for about $660million from Blackstone Group Inc.

Duke, which provides electricity service to 7.8 million customers in six states, has a market valuation of about $61 billion, while NextEra ended Tuesday with a market value of $139 billion. Duke has traditionally been seen as a buyer as opposed to a takeover target. It is one of many companies interested in taking over South Carolina’s troubled Santee Cooper utility and Florida’s Jacksonville Electric Authority.

Duke suffered a major blow in July when it was forced with partner Dominion Energy Inc. to kill plans for the controversial Atlantic Coast gas pipeline along the U.S. East Coast, citing ongoing delays and “cost uncertainty.” It has also been under increasing fire in recent years over the use of coal ash ponds that store waste at coal-fired power plants.