BIRMINGHAM, Ala. (AP) — The Laclede Group Inc. is acquiring Alabama Gas Corp., the natural gas utility business of Energen, for about $1.28 billion in cash.
The deal will expand Laclede's geographic footprint beyond its home state of Missouri and boost its customer base from 1.13 million customers to about 1.55 million. Alabama Gas Corp. is the largest natural-gas utility in Alabama.
Laclede, a natural-gas utility based in St. Louis, will also take on about $320 million of debt as part of the agreement.
For Energen Corp., the sale pushes it closer to becoming a pure exploration and production company. The Birmingham company said that it will use the proceeds to reduce debt, allowing it to accelerate drilling and development of its Permian Basin assets starting next year.
The deal, which is subject to approval by the Alabama Public Service Commission, is expected to close in 2014 and add to Laclede's earnings in 2015.
Alabama Gas spokeswoman Sherri Goodman said the company employs 960 people, and no significant changes in the number of staff are expected.
Shares of Laclede fell 76 cents to $45.47 by midmorning, slightly worse than the broader market. Energen shares added 17 cents to reach $81.69.