Duke Power, PanEnergy to Combine

Duke Power Co. unveiled plans to merge with natural gas pipeline operator PanEnergy Corp. in a $7.7-billion stock transaction, the latest proposed merger in the rapidly consolidating U.S. electric and natural gas industry. The deal would form a $23-billion powerhouse in the soon-to-be deregulated domestic electric industry and solidify Duke’s standing in the top tier of U.S. electric and natural gas wholesalers. The tax-free stock transaction would combine Charlotte, N.C.-based Duke with Houston-based PanEnergy, North America’s third-largest marketer of natural gas. Based on Duke’s closing price of $47.875 on Friday, PanEnergy stockholders would receive about $50 a share. PanEnergy’s stock, which closed Friday at $42.25 a share on NYSE, gained $1.75 to $44. Duke lost $1.75 to close at $46.125, also on the NYSE.