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Wisconsin Energy will buy Peoples Gas parent Integrys for $9.1 billion

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Updated: June 23, 2014 8:42AM

Wisconsin Energy Corp. is buying Integrys Energy Group Inc. for about $5.7 billion in cash and stock. The combined company will be called WEC Energy Group Inc. and serve more than 4.3 million total gas and electric customers across Wisconsin, Illinois, Michigan and Minnesota.

The transaction will combine Wisconsin Energy’s electric and gas utility, We Energies, with Integrys’ electric and gas utilities, Wisconsin Public Service, Peoples Gas, North Shore Gas, Minnesota Energy Resources and Michigan Gas Utilities.

Under the deal announced Monday, Integrys stockholders will receive 1.128 Wisconsin Energy shares and $18.58 in cash for each share they own. Total consideration is worth $71.47 per Integrys share, a 17 percent premium to the company’s Friday closing stock price of $60.95. The consideration will be 74 percent stock and 26 percent cash.

Shareholders of Chicago-based Integrys will own approximately 28 percent of the combined company. The company’s shares surged $9.95, or 16.3 percent, to $70.90 in premarket trading about two hours ahead of the market open.

Wisconsin Energy and Integrys put the transaction’s total value at $9.1 billion including the assumption of debt.

Wisconsin Energy Chairman and CEO Gale Klappa will serve in the same posts for the combined company. Integrys Chairman and CEO Charlie Schrock will stay in his current roles until the acquisition is complete. He will retire upon the closing.

WEC Energy will be headquartered in metropolitan Milwaukee with operating headquarters in Chicago, Green Bay and Milwaukee. Wisconsin Energy is based in Milwaukee.

Both companies’ boards unanimously approved the deal, which is targeted to close in the summer of 2015. It still needs the approval of both companies’ shareholders, as well as approvals from the Federal Energy Regulatory Commission, Federal Communications Commission, Public Service Commission of Wisconsin, Illinois Commerce Commission, Michigan Public Service Commission and the Minnesota Public Utilities Commission.

Shares of Wisconsin Energy added a penny to $46.90 in premarket trading.

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