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US, UK utilities to merge
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June 11, 1997: 7:37 a.m. ET
PacifiCorp to buy Energy Group for $6 billion as early as Friday
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NEW YORK (CNNfn) - PacifiCorp. will soon acquire Energy Group PLC of Britian, which was recently spun off from Hanson PLC, for $6 billion, creating a power behemoth with holdings in North America, Britain, and Australia.
An announcement is expected as early as Friday, the Wall Street Journal reported on Wednesday. Both boards are "very close" to wrapping up negotiations.
A combined company, with revenue of $10.4 billion, would match Southern Co. as the United States' largest utility and would serve more five million customers in power generation, coal and natural gas services.
The deal provides Energy Group an opportunity to unlock value for its shareholders, who have yet to benefit from the extensive demerger of Hanson.
In a statement issued Tuesday afternoon, Energy Group said any deal would likely come at a 20-percent premium to the London closing stock price of 580 pence. That drove Energy Group's American depositary shares soaring 5-1/8 to 42 on the New York Stock Exchange.
Because of the talks, Energy Group said it will not issue its preliminary six-month results for the period ended March 31 until the negotiations are settled.
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PacifiCorp
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