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Power giant created
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December 22, 1997: 9:54 a.m. ET
American Electric links with Central & South West in $6.6 billion deal
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NEW YORK (CNNfn) - A new electric utility giant will be formed as American Electric Power Co. and Central & South West Corp. on Monday reached a $6.6 billion merger deal.
The merger, which would be the largest electricity utility deal to date, will bring together power generation operations from Michigan all the way to Texas.
Under the deal, AEP will issue $6.6 billion in stock to CSW shareholders, who will then own 40 percent of the company.
CSW has been looking around for a partner for months, but AEP hadn't been considered a likely buyer for the Dallas-based utility.
The newly formed company will have 4.6 million customers in 11 states and 4 million overseas, mainly in the United Kingdom. Central & South West has strong gas power generation interests while AEP's generation is geared more toward coal.
The utilities industry has been undergoing a period of strong consolidation over the past year, prompting concern among federal regulators about market monopolies. If the merger goes through, the approval process could take up to 18 months.
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