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Scana buys PS No. Carolina
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February 17, 1999: 9:22 a.m. ET
$900M purchase to create utility company with $2B in sales
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NEW YORK (CNNfn) - Scana Corp., an electric utility in South Carolina, said Wednesday it agreed to buy Public Service Co. of North Carolina in a deal worth $900 million, including assumption of debt.
The merger would create a utility serving about 1.2 million electric and gas customers in the Carolinas with annual sales of $2 billion, the companies said. Scana also provides telephone and mobile radio service to 350,000 customers in the Southeast.
Under the deal, Public Service shareholders will receive $33 cash or Scana stock for each share, subject to certain limits. Public Service stock closed up 1/8 at 22-3/4 Tuesday.
Based on Public Service Co.'s 20.4 million shares outstanding at year-end, the equity being acquired would be worth $673 million, indicating Scana will assume about $227 million in debt.
The companies didn't specify how much debt Scana will take on from the deal and officials weren't immediately available to comment.
Scana also announced a dividend of 38-1/2 cents a share for the first quarter but said it would cut the quarterly payout to 27-1/2 cents thereafter. It said the move will bring it in line with other "growth-oriented utilities."
"The decision … was not an easy one, but it was a decision our board considered appropriate to give us the flexibility to deal with the demands of a more competitive utility industry," Scana Chairman William Timmerman said.
Scana, based in Columbia, S.C., had sales of $1.6 billion last year and employs 4,700 people. Public Service is based in Gastonia, N.C., and had about $300 million in sales last year with 1,000 employees.
The deal is subject to approval by regulators and is meant to be tax-free to Scana and Public Service shareholders who get stock. Any cash received is expected to be taxed as capital gains, the companies said. 
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Scana Corp.
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