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(Bloomberg) — NextEra Energy Inc. is in discussions to acquire utility rival Dominion Energy Inc. in a mostly stock deal aimed at helping address the growing demand for power from data centers, according to a person familiar with the matter.
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A transaction could be announced as soon as Monday, said the person, who asked not to be identified because the information was private. An agreement hasn’t been reached and talks could still end without one, the person added.
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Representatives for NextEra and Dominion didn’t immediately respond to requests for comment. The talks were reported earlier by the Financial Times.
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Florida-based NextEra’s shares are up 16% this year, giving it a market value of $195 billion. Richmond, Virginia-based Dominion has gained 5.4% since Jan. 1 for a market value of about $54 billion.
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NextEra is already the largest US utility by market capitalization, as well as the country’s biggest developer of renewable energy. Including debt, the combined company would have an enterprise value of about $419 billion, according to data compiled by Bloomberg.
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Buying Dominion would expand NextEra’s reach into the largest electric grid, PJM Interconnection. PJM extends from Washington to Chicago, and encompasses Northern Virginia, which has the country’s biggest concentration of data centers.
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Rising demand for electricity from data centers, as well as new factories and overall electrification, has put utility companies like NextEra and Dominion in the spotlight. Tech firms are racing to connect their data centers to the power grid, investors are eager to fund new power infrastructure and the Trump administration is pushing grid improvements and accelerated data center development.
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This supercharged environment has led to a surge in power deals. Recent deals include Stonepeak Partners LP and Bernhard Capital Partners buying Louisiana utility Cleco Power, BlackRock Inc.’s Global Infrastructure Partners buying Minnesota utility Allete Inc. and independent power producer Constellation Energy Corp. buying Calpine Corp.
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In 2020, NextEra made an unsuccessful bid to take over utility giant Duke Energy Corp. in what could have been the largest-ever US utility deal, Bloomberg News reported at the time.
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“It’s a consolidating industry,” said Paul Patterson, an analyst for Glenrock Associates. “If Dominion is willing to sell, it does not surprise me that NextEra might want to buy it given its history of prior acquisition attempts.”
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(Updates with analyst’s comment in last paragraph.)
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