CenterPoint Energy, a Houston, Texas-based natural gas and electric utility company with sales and services operations in more than 30 states, on April 23 said it would buy Evansville, Indiana-based Vectren in a deal valued at more than $8 billion, including the assumption of more than $2 billion in Vectren debt.

Both companies in statements issued Monday said their business operations are complementary, and said the deal enables them to expand “across a larger U.S. footprint.” CenterPoint delivers natural gas in six states—Texas, Oklahoma, Minnesota, Louisiana, Mississippi, and Arkansas—in addition to its electric utility service to the Houston area, where it maintains the region’s power transmission and distribution service.

Vectren delivers natural gas to customers in Indiana and Ohio, and also provides electricity to the Evansville area in southwestern Indiana. The company also has non-utility businesses for infrastructure services and renewable energy project development.

“This merger represents a significant step toward our vision to lead the nation in delivering energy, service and value,” Scott M. Prochazka, CenterPoint’s president and CEO, said in a statement Monday announcing the merger. “By combining our two highly complementary companies, we are creating an energy delivery, infrastructure and services leader that will drive value for our shareholders and customers, while enhancing growth opportunities for our businesses. From the evolution of customer expectations to the development of innovative technologies, this is a time of extraordinary opportunity for our industry. As a combined company, we will continue to focus on a future that benefits our customers, employees, communities and shareholders.”

The boards of both companies unanimously approved the deal, which brings together companies with about $29 billion in combined assets. Vectren shareholders will receive $72 for each share of Vectren common stock, a roughly 10% premium over the April 20 closing price of $65.55 per share. CenterPoint Energy also will assume about $2.5 billion in Vectren debt.

“Today’s news marks the next chapter for Vectren, and its subsidiary companies,” Carl Chapman, Vectren’s president and CEO, said in a statement Monday. “CenterPoint is the right partner because they demonstrate the values and commitment to customers and communities long demonstrated by Vectren. Together, we will be a stronger, more competitive company that will be well-positioned to continue to provide value for all of our stakeholders in the years to come. Today is the beginning of a bright future for the evolution of our company, and we are optimistic about becoming part of the CenterPoint Energy family.”

The merged company will retain the CenterPoint Energy name, with corporate headquarters in Houston. Vectren will become a CenterPoint company and continue to be headquartered in Evansville. The deal is expected to close in early 2019, with Prochazka as CEO and president of the merged companies. The companies said other executives would be announced when the deal closes.

CenterPoint was literally in the eye of the storm last fall during power restoration efforts in Texas in the wake of Hurricane Harvey, which caused widespread flooding and damage in the Houston and Gulf Coast area in August 2017. The company in March 2018 received three awards from the Edison Electric Institute for power restoration and emergency assistance efforts over the past year, including for its work after Harvey, after severe storms in Sealy, Texas, in May 2017, and for work in Florida after Hurricane Irma in September 2017.

CenterPoint’s natural gas sales and services business has customers in 33 states. The company has about 8,000 employees. Vectren has about 5,500 employees.

Vectren in February announced a plan to close three of its coal-fired units in Indiana, as part of a transition to more natural gas-fired and solar power generation. The plan includes the addition of 50 MW of solar power capacity, and construction of an 800- to 900-MW gas-fired plant on the site of the utility’s existing A.B. Brown coal-fired plant on the Ohio River near Evansville.

Vectren said it would retire two 245-MW coal-fired units at Brown and continue to operate two 88-MW gas-fired units. Vectren at the time also said it would close a 90-MW coal-fired unit at its F.B. Culley Generating Station in Warrick County and end its co-ownership of a 150-MW coal-fired unit at the Warrick Generating Station near Newburgh, Indiana, a plant primarily owned by Alcoa.

CenterPoint as part of the agreement also said it will contribute an additional $3 million per year for at least five years to the Vectren Foundation, which supports education, environmental conservation, and environmental stewardship, along with community revitalization and sustainability across Vectren’s service area.

—Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine)