Emera To Buy Teco Energy For $10.4 Bln.

(RTTNews) - Canadian power company Emera Inc (EMA.TO) on Friday said it has agreed to buy U.S. electric and gas utility Teco Energy Inc (TE) for $27.55 per share in cash as part of efforts to expand into Florida and New Mexico. The deal represents an aggregate purchase price of about $10.4 billion, including nearly $3.9 billion of debt.

The $27.55 per share offer price represents a 48 percent premium to the closing price of Teco as of July 15, the last trading day prior to reports of Teco's strategic review.

The announcement sent Teco shares surging 28 percent in after-hours trade on the New York Stock Exchange.

The deal is expected to close by mid-2016, and is subject to various approvals, including the Federal Energy Regulatory Commission.

Emera anticipates the deal to be significantly accretive to earnings per share, with accretion expected in the first full year of operations, growing to more than 10 percent by the third full year.

By acquiring Tampa, Florida-based Teco, Emera gets to expand its geographic platform into Florida and New Mexico - adding two new regions beyond its existing U.S. base in the Northeast.

The deal will also establish Emera in the regulated natural gas local distribution business. The combined company will have over $20 billion of assets and more than 2.4 million electric and gas customers.

Emera said the deal presents significant near-term capital and customer service investment opportunities. Taken together, the pro forma capital expenditure profile of the two companies includes about $6.4 billion in capital investments from 2016 to 2019.

The company also said the deal provides additional support to its 8 percent dividend growth target through 2019, and upon closing positions, Emera to extend the dividend growth target beyond 2019.

The deal comes as power companies strive to consolidate amid tougher regulations, increased costs and some pressure on revenues.

EMA.TO closed Friday at C$44.05, down C$0.44 or 0.99%, on the Toronto Stock Exchange.

TE closed at $21.07, up $0.01 or 0.05%, on the New York Stock Exchange. In after hours, the stock jumped $5.92 or 28.10% at $26.99.