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Duke cleared to buy Cinergy for $9 billion

/ Source: The Associated Press

North Carolina utilities regulators on Friday approved Duke Energy Corp.'s purchase of Cinergy Corp., clearing the way for a $9 billion deal that will create one of the nation's largest public utilities.

The North Carolina Utilities Commission placed more than 70 conditions on the deal, including requirements that Charlotte-based Duke Energy must use $117.5 million for a one-year, across-the-board cut in electricity bills for North Carolina consumers.

The company had already received regulatory approval from the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission, and regulatory bodies in Ohio, Indiana, Kentucky, and South Carolina.

Shareholders of both companies approved the deal two weeks ago.

North Carolina "is the last state regulatory body," Duke Energy spokesman Randy Wheeless said. "We're pleased that the commission has taken action. The order is 122 pages so we haven't had the chance to fully review it."

Duke Energy agreed in May to buy Cincinnati-based Cinergy in a deal that will create a company with about 5.4 million customers and $70 billion in assets.

Paul Anderson, chief executive and chairman of Duke Energy, expects to close the Cinergy acquisition before the end of April.

Once the deal is completed, Duke will be the nation's top power generator until Chicago's Exelon Corp. closes its acquisition of New Jersey's Public Service Enterprise Group Inc. which is expected to occur later this year.

James Rogers, chief executive and chairman of Cinergy, will become the chief executive officer of the combined company. Anderson is slated to move into a role as executive chairman.

Under the merger agreement, each Cinergy share will be converted to 1.56 shares of the new Duke Energy at the close of the deal.

Duke expects to save about $655 million in five years as a result of the deal, mostly through about 1,500 job cuts. About 1,000 jobs have already been trimmed, company officials have said. Most of the cuts were expected to come through attrition, early retirement and other severance deals.