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Dominion to buy Questar for US$4.4bn

The combined company will serve about 2.5mln electric utility customers and 2.3mln gas utility customers

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It will also operate more than 15,500 miles of natural gas transmission

Power producer Dominion Resources (NYSE:D) said it is to buy natural gas distributor Questar (NYSE:STR) for about US$4.4bn.

The firm said it is an all-cash deal to expand its natural gas operations, with the US$25-per-share offer representing a premium of nearly 23% to Questar's close price on Friday.

The combined company will serve about 2.5mln electric utility customers and 2.3mln gas utility customers in seven states.

It will also operate more than 15,500 miles of natural gas transmission, gathering and storage pipelines and about 24,300 megawatts of power generation.

There has been a spate of deals between utilities and natural gas distributors caused by weakening power demand due to increased energy efficiency.

At the end of last year, NYSE:DUK/Duke-Energy/" rel="6158">Duke Energy (NYSE:DUK), the largest U.S. power company, announced a US$4.9bn deal for Piedmont Natural Gas (NYSE:PNY), while Southern (NYSE:SO) agreed to buy AGL Resources (NYSE:GAS) for about US$8bn.

Quick facts: Dominion Resources

Price: 80.62 USD

NYSE:D
Market: NYSE
Market Cap: $67.73 billion
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