Associated Press and Globe Staff
Northeast Utilities and NStar disclosed plans today for a $17.5 billion merger, a deal that would create one of the largest utilities in the nation.
In a press release, the companies are calling the transaction a merger of equals. When the deal closes, Northeast Utilities stockholders are expected to own about 56 percent of the combined business. Also, the NStar name would disappear at that time.
But Thomas J. May, chairman, president, and chief executive of NStar, will serve as president and chief executive of Northeast Utilities when the deal closes.
Charles W. Shivery, chairman, president, and chief executive of Northeast Utilities, will become the non-executive chairman of Northeast Utilities for a period of 18 months upon completion of the deal. May will assume the additional role of chairman after 18 months when Shivery plans to retire.
Northeast Utilities and NStar said that the combined company will “provide electric and gas energy to over half of the customers in New England.”
The combined company, which will continue to be called Northeast Utilities, will operate six regulated electric and gas utilities in three states and will have nearly 3.5 million electric and gas customers. Northeast Utilities will have nearly 4,500 miles of electric transmission lines, 72,000 miles of electric distribution lines, and 6,000 miles of gas distribution lines, the release added.
NStar has roughly 3,000 employees.
“There are no merger-related layoffs planned at this time,” NStar spokeswoman Caroline Allen said. “This (transaction) is about growth, not about job cuts.”
In a statement, May said: “With this transaction, we will create a larger, stronger, and more diversified regulated utility with over 9,000 employees in Massachusetts, New Hampshire, and Connecticut, thereby benefiting our region as a whole.”
Northeast Utilities said it will have dual headquarters in Hartford and Boston.
The transaction is worth $40.28 per share, a 2 percent premium to NStar’s closing price Friday. Each Nstar stockholder will receive 1.312 Northeast shares for each share they own.
The transaction is subject to reviews by federal and state energy authorities, Northeast Utilities and NStar said.